ONGC acquires 10 per cent stake in UAE's Zakum oilfield

Oil and Natural Gas Corporation (ONGC)-led consortium of Indian state oil firms have acquired 10% stake in Abu Dhabi’s offshore Lower Zakum Concession for $600 million.
The acquisition is part of deal inked between company executives and UAE officials in presence of visiting Prime Minister Narendra Modi and Abu Dhabi crown prince Sheikh Mohammed bin Zayed Al Nahyan in Abu Dhabi.

Key Facts

The Lower Zakum Oil Field is located 84 km north-west of Abu Dhabi Islands. It was discovered in 1963 and is owned and developed by Abu Dhabi National Oil Company. The total proven reserves of it are around 17.2 billion barrels and production is centred on 425,000 barrels per day (67,600 m3/d).
With this deal, Indian oil and gas companies for first time have acquired stake in development of Abu Dhabi’s hydrocarbon resources. The deal gives consortium of Indian oil companies comprising of Indian Oil Corp. Ltd and Bharat Petroleum Corp. Ltd’s overseas arm Bharat PetroResources Ltd, access to about 2 million tonnes of annual share from field. The deal has term of 40 years. It will help India to meet its growing demand for future energy and refined products.

 

Background

Due to lower and fall in global oil prices, oil-rich nations had resorted to ways of reducing risk and balancing their budget deficits by selling their prime oil and gas assets and diversifying into non-oil sectors of economy. Indian energy companies backed by diplomatic efforts have been aggressively pursuing to acquire share in these most prolific oil and gas fields sold by oil-rich nations. In 2016, Indian oil companies had bought stakes in two oil and gas field assets in Siberia owned by Russia’s state-backed Rosneft Oil Co. for $3.3 billion.

Month: Current Affairs - February, 2018