ONGC Videsh Limited (OVL) is in talks with Russia’s Rosneft for buying stake in the Madagan 2 field in the Northern part of the Sea of Okhostk.
“An OVL team has just returned after collecting data for prospecting. Talks are in the preliminary stages. Russia will be key to OVL’s plan for aggressive expansion of portfolio over the next few years, OVL Managing Director D. K. Sarraf told journalists at Petrotech 2012.
The visiting Russian Deputy Energy Minister, Yury Sentyurin, said Russia had already sounded out OVL for the Madagan 2 field which was operated by Rosneft. However, of late, Indian companies have not found favour with the Russian government or the companies in various oil and gas projects that have been identified by OVL for potential investments.
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“We have suggested that ONGC look at investing in Madagan 2,” Mr. Sentyurin told journalists on the sidelines of the conference. The proposal for such an investment was made at the Joint Working Group meeting between India and Russia held in New Delhi on Saturday last. Russia granted exploration licences for five areas in the Sea of Okhotsk — Magadan-1, 2 and 3, Lisyansky and Kashevarovsky — to Rosneft without bidding at the end of last year. Recoverable resources in the area are estimated at 2.8 billion tonnes of oil equivalent. Rosneft recently teamed up with Norway’s Statoil in four new joint ventures, including exploring the Magadan 1, Lisyansky and Kashevarovsky licence blocks, with prospective recoverable resources at more than 1.4 billion tonnes.
ONGC already has a stake in Russia’s Sakhalin-1 oil and gas project in the Pacific, and, in 2008, it bought the Imperial Energy oil company in Western Siberia.
In a related development, OVL is planning to submit a proposal to Marathon Oil for buying half of its 20 per cent stake in the Athabasca Oil Sands Project in Canada. OVL last year tried to acquire a stake in the Shell-operated 255,000 barrel-a-day mining and synthetic crude processing operation, but the deal did not materialise.
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ONGC is likely to discuss the issue with the Marathon Oil Chairman, Clarence P. Cazlot, who is here for the Petrotech 2012 conference.
The Muskeg River mine’s present production capacity is 155,000 barrels per day (bpd), while the Jackpine mine has 100,000 bpd.