Fri Jun 15, 2007 11:02 AM BST
(Refiles to correct spelling error in “update”) (Adds background)
NEW DELHI, June 15 (Reuters) – India’s cabinet on Friday approved state-run explorer Oil and Natural Gas Corp. (ONGC.BO: Quote, Profile , Research) to buy a 33 percent stake in an Egyptian deepwater gas block from operator Royal Dutch Shell (RDSa.L: Quote, Profile , Research), a minister said.
“ONGC’s proposal to buy stake in Shell’s block in Egypt has been cleared. The amount is around $380 million,” the cabinet minister, who did not wish to be identified, said.
Shell has announced the North East Mediterranean Deepwater block, in which it holds 84 percent, has probable reserves of 15 trillion cubic feet of gas, according to a U.S. Department of Energy Web site.
Malaysian state oil and gas company Petronas [PETR.UL] owns the remaining 16 percent in the concession, which was awarded in 1999.
The government has set a target for ONGC Videsh, the overseas investment arm ONGC, to produce 6.34 million tonnes of oil and 1.65 billion cubic metres of gas in the fiscal year ending March 2008.
To secure more equity oil, the company is pursuing oil and gas assets in Sudan, Iran, Iraq, Nigeria, Algeria, Egypt, Syria, Libya, Russia, Venezuela, Kazakhstan, Azerbaijan.
This is the second overseas tie-up between ONGC and Shell, and the second asset in the region.
In April 2005, ONGC Videsh acquired a 15 percent stake in Brazil’s BC-10 block after Shell exercised its pre-emption option to buy an additional 30 percent from Petrobras (PETR4.SA: Quote, Profile , Research) (PBR.N: Quote, Profile , Research) and transferred half in favour of the Indian company.
ONGC Videsh and its partner IPR Red Sea Inc. recently made an oil find in the Gulf of Suez.
© Reuters 2007. All Rights Reserved.
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