OVL to invest $ 850 mm in pipeline and refinery projects in Sudan

Jan 06, 2004 01:00 AM

The revenue accruals to ONGC Videsh Ltd (OVL) from its investment in the Greater Nile Oil Project (GNOP) of Sudan during the current financial year are expected to exceed the original estimates by 23 %. OVL has informed the Empowered Committee of Secretaries that during 2003-04, the project is expected to generate revenue accruals of about $ 288 mm as against the original estimates of $ 234 mm.
This will be the first full year of the operation of the project after OVL had picked up a 25 % stake in it. OVL has also told the committee that the project is performing better than expected and till the end of October 2003, revenue accruals were around $ 170 mm.

OVL holds a 25 % stake in GNOP via its wholly owned subsidiary ONGC Nile Ganga registered at Amsterdam. This stake was acquired by buying 100 % stake in Talisman Greater Nile and converting it into ONGC Nile Ganga. After accounting for all the revenues and the expenses incurred on the project, OVL had paid $ 669.1 mm for taking the 25 % stake in the project.
The encouraging results from GNOP have prompted OVL to consider taking the maximum possible stake in “Project Alpha”, an exploration block in Sudan. The project consists of three blocks where major oil discoveries have already been made. OVL is proposing an investment of around $ 360 mm in this project.

In addition, OVL also proposes to invest around $ 850 mm in pipeline and refinery projects in Sudan. Therefore, if all the projects in Sudan come through, OVL’s total investment commitments in Sudan will be around $ 2,041 mm. OVL has informed the committee that these figures may go up substantially in case significant upsides arise in GNOP and discoveries are made in the exploration blocks in Sudan.
"In that eventuality, further investments would be required for development of the discoveries in order to bring them into production," it has said.

Source: Business Standard
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