Indian Oil-Oil India consortium has dropped plans to buy stake in Kazakhstan's massive Kashagan oilfield but is in advanced stages of talks to buy Etablissements Maurel & Prom SA's assets in Gabon.
"The Kazakhstan project is an enormous project involving huge financial exposure. We initially looked at acquiring stake of some of the companies which had plans to sell their stakes in Kashagan. But decided not to pursue it as we were getting a small share of the pie with very little value addition," OIL Chairman and Managing Director N M Borah told reporters in New Delhi.
IOC-OIL were part of the Indian consortia led by ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), and GAIL that was interested in Kashagan. OVL and GAIL continue to be interested should US major ExxonMobil Corp sell its stake.
Exxon Mobil, Eni SpA, Kazakhstan's state-run KazMunaiGaz, Royal Dutch Shell and Total SA of France each hold 16.81 % stake in Kashagan project. ConocoPhillips and Japan's Inpex Corp hold 8.4 % and 7.56 %, respectively.
Kashagan is the largest oil field discovered in the last 30 years, with oil reserves seen at a minimum of 7 billion to 9 billion barrels.
Another official said the field development would cost $ 32 billion and production is likely to start in end 2012.
Kashagan, operated by Italy's Eni, is expected to produce 300,000 barrels of oil per day (about 15 million tonnes a year) by 2014. The field lies in the northern part of the Caspian Sea.
Borah said OIl is looking at acquisition of a producing or a discovery oil property abroad to add to the record 4 million tons a year of crude oil output it is expecting from domestic fields this year.