A. Highest ever Profit earned by OVL during 2012-13
Financial results of ONGC Videsh Limited (OVL), the wholly-owned subsidiary of ONGC, for the FY’13 were considered and approved by the Board in its meeting held on 21st May 2013. The highlights of the results are as below:
|Crude Oil||MMT||4.34||6.22||(-) 30.2|
|Natural Gas||BCM||2.92||2.53||(+) 15.3|
|Total Oil and Oil Equivalent Gas||MMTOE||7.26||8.75||(-) 17.0|
|Gross Revenue||Rs/ Crore||18,029||22,637||(-) 20.4|
|Net Profit||Rs/ Crore||3,929||2,721||(+) 44.4|
|Net Worth||Rs/ Crore||29,184||19,941||(+) 46.4|
During the year, the company earned the highest-ever profit of Rs 3,929 Crore, an increase of 44.4% as compared to the previous year.
Net worth increased from Rs 19,941 crore to Rs 29,184 crore, inter alia due to increase in equity share capital from Rs 1,000 crore to Rs 5,000 crore to the parent company ONGC during FY’13.
The oil production during the year was lower mainly due to adverse geo-political situation in Syria and South Sudan.
B. Bond Issue
To part finance the ACG and BTC acquisition, the company has made an inaugural USD bonds offering in international capital market with a duel tranche USD 800 million Notes in April, 2013. The offering was well received with the order book closing at about USD 3 billion. The 5 year tranche of USD 300 million was priced at a spread of 190 basis point above the 5 year US treasury at yield of 2.574% p.a. and the 10 year tranche of USD 500 million was priced at a spread of 210 basis point above the 10 year US treasury at yield of 3.756% p.a. This inaugural bond offering, guaranteed by the parent company ONGC, represent the largest REG-S only issuance by an Indian issuer in the USD bond markets at the lowest coupon rates and has set a benchmark in pricing by Indian issuer.
OVL currently has participation in 32 projects in 16 countries, out of which 11 are producing projects, 5 discovered/ under-development projects, 14 exploratory projects and 2 pipeline projects.
1. New Acquisitions
- The acquisition of Hess Corporation’s 2.7213% participating interest in the Azeri, Chirag and the Deep Water Portion of Guneshli Fields in the Azerbaijan sector of the Caspian Sea (“ACG”) and 2.36% interest in the Baku-Tbilisi-Ceyhan (“BTC”) Pipeline was completed on 28th March 2013. The acquisition would bring about 9% additional proved reserves to OVL portfolio and daily oil production of about 19,000 barrels or about 0.9 MMT p.a.
- The company has finalized definitive agreements for the acquisition of the 8.40% Participating Interest (PI) of ConocoPhillips in the North Caspian Sea Production Sharing Agreement (NCS PSA) that includes the Kashagan Field, in Kazakhstan. The Kashagan Field of the Kazakh North Caspian Sea is the world's largest current development project. The acquisition which is subject to relevant government/regulatory approvals and priority rights, is expected to close in 2013. The existing partners did not exercise their priority rights during the prescribed period. The approval of Government of India for the acquisition has been received. Approval of Government of Kazakhstan is awaited.
- The company has won two exploration blocks in Colombia under Colombian Bid Round 2012 (i) Offshore block Guaoff-2 in Guajira Basin with 100% PI and (ii) Onshore Llanos-69 (LLA-69) block in prolific llanos basin of Colombia by Mansarovar Energy Colombia Limited (MECL – a 50:50 joint venture between OVL and Sinopec of China).
- The company in a 50:50 consortium with another Indian oil PSU (with OVL as the operator) has submitted the bid on 2nd April, 2013 for two shallow water blocks in Bangladesh namely SS-04 and SS-09. Both the blocks are expected to be awarded to the consortium.
The company discovered oil in the first well of the onshore exploration block CPO-5 in Colombia in which it is the operator with 70% participating interest. The first of the two commitment wells i.e. Kamal-1 was spudded on 29thOctober 2012 and drilled up to the target depth of 10,500 feet with oil discovery. The second well is currently under testing with encouraging results.The company discovered oil in the first well of the onshore exploration block CPO-5 in Colombia in which it is the operator with 70% participating interest. The first of the two commitment wells i.e. Kamal-1 was spudded on 29thOctober 2012 and drilled up to the target depth of 10,500 feet with oil discovery. The second well is currently under testing with encouraging results.
- Subsequent to the ‘Cooperation Agreements’ signed between the Government of Republic of South Sudan and the Government of the Republic of Sudan on 27th September 2012, the shutdown orders earlier issued by the Government of South Sudan in January 2012 has been lifted following the settlement of issues between the two Governments on 12th March 2013 and 'Oil Resumption Order' by the Government of South Sudan for resumption of petroleum operations and production on 14th March 2013. Consequently, production from Block 5A, South Sudan which was producing approx 16,000 bopd before shutdown has resumed production from 6th April 2013. The production from the Block 1, 2 and 4 falling in South Sudan has resumed on 13th April 2013. Before stoppage of production, Oil production from this area was about 60,000 bopd. Production is expected to build up from the above blocks during the coming months. The company holds 24.125% participating interest in Block 5A and 25% participating interest in Block 1, 2 and 4.
- The development of Lan-Do field in Block 06.1, Vietnam, where the company has 45% PI, has been completed and the field was put to production on 7th October 2012. The completion of Lan-Do field enhanced the production capacity of Block 06.1 by 0.20 BCM.
- Project Carabobo 1 in Venezuela is under development and had started early production in January 2013. The project targets to reach peak production level of 4,00,000bopd by FY’ 18. OVL’s participative interest in this project is 11%.
- Company’s other development projects are Blocks A1 and A3 in Myanmar. These are likely to commence natural gas production in Q2 of FY’14 which is likely to reach 8.84 MMSCMD by end of FY’14. Production is expected to reach peak level of 14.50 MMSCMD in Q2 of FY’15. OVL has 17% share in the blocks.
D. Long Term Plans
The company continues to pursue securing energy independence for the country through both organic and inorganic growth by participating in bidding rounds in exploration blocks and acquiring discovered/producing oil and gas projects overseas with strategic target to reach production level of 20 MMToe p.a. by FY’18 and 60 MMToe p.a. by FY’30.
Oil and Natural Gas Corporation Ltd.
Corporate Communications, New Delhi,