Indian oil and gas company ONGC Videsh Ltd (OVL) has opened talks over the acquisition of further oil and gas assets in Kazakhstan, despite losing out on the purchase of an 8.4% stake in the offshore Kashagan field.
The overseas arm of Indian state owned ONGC is still keen to buy into the Kazakh oil and gas sector, Managing Director D K Sarraf told journalists on September 25. The move comes despite fury in India when Astana blocked its deal to buy into the giant Kashagan to hand the stake to China.
"One failure does not mean we stop operations in the country completely," Sarraf said, according to India's Economic Times. "We continue to be engaged in Kazakhstan. We are in the process of identification of more blocks at exploration and development stage (for acquisition)."
OVL made its first investment in Kazakhstan with the acquisition of a 25% stake in the Satpaev field. In 2012, the company agreed with US energy major ConocoPhillips to buy its stake in Kashagan - the world's largest current development project - for $5bn.
However, after months of delays, the Kazakh government blocked the sale under legislation concerning "strategic" assets in July. The stake was then handed to state-owned KazMunaiGas, which turned around to sell it on to China's CNPC. Alongside several other investments from Beijing in Central Asia, deal - for the same price as the OVL offer - was signed during Chinese President Xi Jinping's visit to Kazakhstan in mid-September and is due to close by the end of the year.
Ahead of the announcement of the Chinese gazump, analysts had speculated Kazakhstan may risk upsetting other Indian investments. However, Delhi is almost as thirsty for energy as Beijing, and can ill afford allowing its pride to prevent it continuing to challenge for a role in the growing Central Asian oil and gas bonanza.
India's growing population and economy mean the country's demand for oil and gas is increasingly steadily. According to a statement from ONGC, the company envisages an increase in OVL's oil and gas production from 8.75 MMTOE (million metric tonnes of oil equivalent) in the 2012 financial year to 60 MMTOE by 2030.
In addition to the Satpaev investment, OVL has invested into the Azeri oil and gas sector, acquiring a 2.72% stake in the Azeri-Chirag-Guneshili field and a 2.36% stake in the Baku-Tbilisi-Ceyhan pipeline. The Indian government is also one of the four countries seeking to build the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline, which will carry Turkmen gas to south Asia.
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