Malaysian oil firm Petronas has cleared the way for ONGC Videsh Ltd's acquisition of stake in two onshore oil blocks in Sudan by waiving off its first right to buyout Austrian firm OMV's stake.
"Petronas has agreed to waive off its pre-emption right to acquire OMV Aktiengesellschaft's stake at the price OVL is paying the Austrian firm," the company sources said in New Delhi on Friday.
OVL, the overseas arm of Oil and Natural Gas Corporation, will acquire OMV's 26.125 per cent stake in exploration block 5A, and 24.5 per cent stake in Block 5B for $115 million.
Petronas Carigali Overseas Sdn Bhd (Petronas) is the operator of Block 5A, while Sudan's national oil company Sudapet has the remaining 5 per cent. In Block 5B, Petronas has 41 per cent, Sudapet 10 per cent and Swedish oil firm Lundin Petroleum AB 24.5 per cent.
As per the contract for Block 5A and 5B, partners have the first right to acquire if anyone of them decides to exit.
"Petronas has agreed to waive this right in OVL's favour," sources said, adding the transaction is now subject to the Sudanese government approval.
Exploration blocks 5A and 5B are located in the Muglad basin and are adjacent to the Greater Nile Oil Project, where OVL acquired 25 per cent stake in March this year from Talisman Energy Inc of Canada.
Block 5A contains the undeveloped Thar Jath field with gross proven and probable oil reserves of 149.1 million barrels.
Sources said OVL's share from Block 5A and 5B production may be over 3 million tonnes of crude oil annually from 2005-06 when they are put to production.
India currently gets 3.2 million tonnes of crude annually from OVL's 25 per cent equity in Greater Nile Oil Project in Sudan.
New Delhi has been encouraging oil companies to take equity stake in oil fields abroad to reduce import dependence and attain energy security. The country imports 70 per cent of its crude requirement. It spent over $16 billion last year to import 82 million tonnes of crude.
Block 5A, located in the Muglad Basin in southern Sudan, contains an undeveloped Thar Jath field which contains gross proven and probable oil reserves of 149.1 million barrels.
Third party estimates put the possible potential reserves in the block, which measures 20,917 km and has four previously drilled wells, at over 2 billion barrels.
Block 5B is a large block of 20,119 square km and is located in the Sudd swamp. Gravity and seismic interpretation show the Muglad rift basin extends into Block 5B and the structural style in the area is similar to the rest of the basin where more than 1 billion barrels of oil have been discovered to date.
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