[lbo-talk] Indian corp ONGC eyes Angola refinery project

[uvj at vsnl.com]

Business Standard

Tuesday, November 1, 2005

ONGC eyes Angola refinery project

Press Trust Of India / New Delhi November 01, 2005

Oil PSU bids for $3.75-billion Sonaref project.

Oil and Natural Gas Corporation has bid to participate in Angola's
$3.75-billion Sonaref project for building a 10 million tonne refinery at
Lobito.

Sonaref project involved setting up a grassroot refinery of 200,000 barrels
per day (10 million tonnes a year) capacity at
Lobito on the Atlantic coast and was linked with equity participation in the
exploration of deepwater blocks 15, 17 and 18, industry sources said.

ONGC plans to participate in the Sonaref project through its subsidiaries
ONGC Videsh Ltd for upstream exploration and
Mangalore Refinery and Petrochemicals Ltd for the refinery project.

Sources said the company had in July held talks with Sonangol in London to
finalise partners for the project and firm up
structure of the partnership. Sonangol had also invited Hydro, Exxon,
Sinopec, Chevron, Energem, Petrosa and the existing group of partners in the
blocks 15, 17 and 18 for the talks.

OVL recently received a communication (from Sonangol) seeking details on
updating market studies for the refinery. It
was preparing the queries in association with MRPL, sources said.

Angola's government-owned Sonangol will hold up to 40 per cent interest and
is looking for partners to keep a minimum of 20 per cent stake. The project
is estimated to cost $3.75 billion and is expected to be completed by
2009-10.

The refinery will come on stream in 2009-10 and approximately half of the
production is destined for domestic consumption and the remaining 50 per
cent will be for export.

The bid comes despite Sonangol blocking OVL's successful bid for acquiring
Shell's 50 per cent equity in the block 18. OVL and Shell had reached
agreement on the block, but the deal could not go through as Sonangol
exercised its pre-emption right to block the sale.

OVL also plans to bid for exploration blocks in ultra deepwater and
deepwater in the Congo and Kwanza basins that are likely to be offered
towards the end of 2005 or early next year.