Angola and Nigeria want development as India targets more oil blocks

Sep 30, 2005 02:00 AM

Leading African oil and gas producers like Nigeria and Angola have told India that participation in their economic development on the lines of China and South Korea is key to winning exploration blocks.
"While expressing keenness on Indian participation in their exploration and other petroleum activities, both Nigeria and Angola have conveyed that preference will be given to those offering attractive economic packages," said Petroleum Secretary S.C. Tripathi, who was leading the Indian delegation to the World Petroleum Congress. "How much share you get in a block, they say, depends on the economic development package you give," Tripathi told.

He revealed that a ministerial-level Nigerian delegation was expected to visit India Nov. 10. In August, India's state-owned ONGC Videsh Ltd got only a smaller 25 % stake in two prime Nigerian offshore blocks despite the highest bid, while South Korea's national oil company was awarded a 65 % stake with additional weightage being given for its plans to build a gas pipeline, a shipyard, a rail link and a power plant.
Similarly in Angola, ONGC Videsh lost out to the Chinese in the race for a 50 % stake in an exploration block being offloaded by global energy major Royal Dutch Shell on the same yardstick.

During presentations at the petroleum congress, African countries have been emphasising that participation in infrastructure and other development projects will be key to their favouring a particular bid for oil blocks. With large areas of the African countries still to witness any development, the oil-rich nations in the region are using the promise of their exploration blocks to lure investments in infrastructure and development projects.
"The two African countries have asked us to work out economic packages to include projects like roads, ports, and refineries as well as other infrastructure projects," a senior Indian official said.

About 180 blocks in Nigeria, including several awarded during earlier rounds and likely to be relinquished by holding companies, will soon be up for grabs. Angola too is expected to invite bids for offshore blocks in January 2006.
In the latest round of bids, India got stakes in three exploration blocks in Nigeria, with ONGC Videsh getting two blocks and private sector Videocon a stake in one block.

Accounting for about 9 % of global hydrocarbon reserves, Africa is increasingly seen as a major source of oil and gas, with not only multinationals but also China and South Korea keenly scouting for opportunities there. The US is currently securing a major share of its oil supplies from Africa. Apart from exploration, state-owned Indian Oil Corp (IOC) is awaiting a response to its offer to upgrade a Nigerian refinery and possibly help set up a new refinery.
It is also studying the possibilities of collaboration in a pipeline, a cooking gas bottling plant and other projects.

Despite being the largest oil exporter among African nations, Nigeria depends on imports for its demands for petroleum products.
"Weare studying the possibility of importing Angolan crude Girassol, which is a medium density low sulphur oil. We will soon send a delegation to Angola to study the possibilities of import," said Indian Oil chairman S. Behuria.

Source: AP
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