Oil India said to study purchase of Shell's Nigerian oil blocks
Oil India Limited is studying an acquisition of Nigerian oil and gas assets owned by Royal Dutch Shell Plc.
Oil India is weighing a bid for stakes Shell holds in some onshore blocks, valued at as much as USD 2 billion. It will partner with India’s Sandesara Group on the potential purchase, according to the people, who asked not to be identified as the deliberations are private.
The explorer joins Dangote Group, controlled by Africa’s richest man and Seplat Petroleum Development Company in seeking to acquire Nigerian assets being sold by Western rivals. Shell and Chevron Corporation are divesting fields in the country amid persistent violence and crude theft in the oil-rich Niger River delta.
India’s government-run oil companies are building on their record USD 5.5 billion of acquisitions last year to secure supplies for Asia’s second biggest energy consumer. Oil India, which had INR 124.9 billion of cash at the end of September, has purchased stakes in gas fields in Mozambique and shale assets in the US over the past 2 years.
Mr S K Srivastava, chairman of Oil India and finance director Mr Rupshikha Saikia Borah didn’t answer two calls each to their mobile phones seeking comment. Sandesara Group Chairman Mr Nitin Sandesara didn’t immediately respond to an email and phone call to his office.
Sterling Energy & Exploration Production Limited, a unit of Sandesara Group, has more than 250 MMbbl of certified oil reserves and 1 trillion cubic feet of natural gas reserves in the Niger Delta, according to its website. Nigeria pumped about 2.1 MMbpd last month.
Mr Simon Henry, CFO said that “Shell said in October divestments in India have been deferred to 2014. The Anglo-Dutch company’s earnings in the country were curbed by almost USD 1 billion last year because of oil theft and a LNG export blockade by the government.”
Earlier this year, Oil & Natural Gas Corp and Oil India paid USD 2.5 billion for a 10% stake in a Mozambique natural gas field. Securing fuel supplies is crucial for Prime Minister Mr Manmohan Singh as India relies on imports to meet about three-quarters of its oil requirements.
Source - Bloomberg