OVL to invest $ 1 bn in Gabon oil block

Jul 11, 2006 02:00 AM

Indian state-run Oil and Natural Gas Corp Videsh Ltd (OVL) is planning to place a $ 1 bn bid for an oil property in the sub-Saharan Gabon oil blocks. Barely one month after acquiring a stake in the Campos basin in Brazil, ONGC Videsh said it is now eyeing an oil property in Gabon.
"OVL, the overseas investment arm of the ONGC, is in discussions with its investment bankers and is expected to put in a bid by end of this month. A listed Canadian oil firm, comprising around three producing blocks in Gabon, holds the oil asset," the company said.

ONGC said negotiations are currently underway with several key players, including oil companies from China. Investment banking circles have said the property in question will be challenging given scattered reserves and needed management.
The OVL has appointed J.P. Morgan as the investment banker and the documents are being given the final touch. The bid size could well be in the region of $ 1 bn given that the properties are producing oil blocks.

The oil majors Shell, Vaalco and Marathon are among other major exploration players in Gabon. OVL, which has expanded its portfolio significantly during last year, has eight overseas assets and is seeking to acquire more oil blocks across the globe. OVL is currently working towards a goal of 20 mm tpy by 2010 with a long-term target of acquiring 60 mm tpy of equity oil and gas overseas by 2025.
Gabon had proven oil reserves of 2.5 bn bpd as of Jan 2005. It is sub-Saharan Africa's fifth largest producer of crude oil.

Source: United Press International
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