ONGC Chairman: Plan To Bid Aggressively for Overseas Blocks

Oil & Natural Gas Corp. (ONGC) plans to aggressively bid for oil and gas assets overseas in upcoming auctions as part of its strategy to more than double oil production abroad to 20 million tons a year by 2020, the chairman of India's flagship explorer said.

ONGC plans to work with other Indian state-run oil and gas companies through its overseas investment arm ONGC Videsh Ltd., or OVL, to bid for assets overseas, A.K. Hazarika told Dow Jones Newswires in an interview late Wednesday.

"Ours is an import-dependent country and we need energy," Hazarika said. "Although, all the companies can go out and bid, we shouldn't be competing against each other. So we will form joint ventures."

India's state-run companies have lagged behind those from bigger Asian rival China in acquiring energy assets overseas.

OVL's last big acquisition was Russia-focused Imperial Energy in January 2009, which it bought for $2.12 billion.

The federal government is now considering creating a sovereign fund focused on resource asset acquisition overseas to seek energy sources for the world's second-fastest growing major economy.

OVL has been shortlisted to bid in Iraq's forthcoming auction round, Hazarika said, adding his company will form a consortium for bidding.

Iraq is offering 12 exploration blocks in its fourth licensing round, which will take place in January.

He said OVL will also be interested in forthcoming auctions in Brazil and Oman.

Early next year, Brazil is expected to hold the 11th bid round for exploration and production blocks in onshore and offshore basins.

OVL has stakes in one producing block and half a dozen exploratory blocks in Brazil.

Oman is expected to offer about five oil and gas blocks in a new exploration licensing round.

"ONGC will look into the properties and take a call based on due diligence," Hazarika said.

He said OVL, which produced 9.43 million tons of oil and oil equivalent gas in the year ended March 31, has invested INR560 billion ($12 billion) so far in overseas assets.

"Money is not a constraint for us as OVL can easily borrow from the market," Hazarika said. He didn't give details about the company's overseas investment plans.

He said OVL also expects to resume exploratory activities in Libya and explore more investment opportunities once normalcy returns in the African country.

OVL declared force majeure and suspended operations in February in an offshore exploration block in Libya, citing political unrest.

Oil companies active in Libya before the civil war began gearing up for the challenge of resuming operations in the country Monday as rebel forces moved closer to taking over Tripoli.