OVL-Sinopec seal $850 m buy http://www.business-standard.com/compindustry/storypage.php?tab=r&autono=105522&subLeft=1&leftnm=1
BS Reporter / New Delhi September 22, 2006
ONGC Videsh Ltd (OVL) and a subsidiary of China's Sinopec Group have acquired Omimex de Colombia, from the Texas-based Omimex Resources for an undisclosed amount in their first joint acquisition. Industry sources said that the deal may be valued of around $850 million.
Sinopec International Petroleum Exploration and Production Corporation (SIPC), a Sinopec Group subsidiary and OVL will each hold a 50 per cent stake in the Colombian company.
Post this acquisition OVL, a wholly owned subsidiary of ONGC, now has 25 overseas assets in 14 countries.
"There are many more deals that will be explored together with the Chinese firm," chairman and managing director R S Sharma had said earlier.
The Cabinet Committee on Economic Affairs has recently approved the OVL-Sinopec joint bid for the acquisition of the US firm.
Omimex de Colombia has onshore production as well as exploration blocks in Colombia with net proven reserves of around 157 million barrels.
"Omimex has oil and gas operations exclusively in Colombia, which include onshore production and exploration areas with gross proved reserves of more than 300 million barrels of oil and production at approximately 20,000 barrels of oil per day," an ONGC release said.
Omimex's assets constitute a 100 per cent interest in the Velasquez oilfield and a 50 per cent interest in the Nare and Cocorna oilfield where the Colombian national oil company Ecopetrol SA holds the remaining 50 per cent. "This will give us one million tonne of oil every year," petroleum and natural gas minister Murli Deora had earlier said.
The JV will help OVL get a 25 per cent stake in the oilfield that produces 20,000 barrels per day. The balance 50 per cent interest in the oil field lies with Ecopetro. Omimex also completely owns the Velasquez-Galan pipeline, which runs 189 kilometres from the Velasquez property to Ecopetrol's Barrancabermeja refinery.
Sinopec Group is China's largest producer and supplier of oil products and major petrochemical products.
Business Standard Ltd. Copyright & Disclaimer