ONGC to acquire Shell's 33 pc stake in Egypt | business | Hindustan Times
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ONGC to acquire Shell's 33 pc stake in Egypt

ONGC Videsh Ltd, the overseas arm of state-run ONGC plans to acquire Royal Dutch/Shell's 33 per cent stake in a deepsea gas field off Egypt.

business Updated: May 28, 2007 10:41 IST

ONGC Videsh Ltd, the overseas arm of state-run Oil and Natural Gas Corp (ONGC), plans to acquire Royal Dutch/Shell's 33 per cent stake in a deepsea gas field off Egypt for 160 million dollars and bring the fuel in liquefied form (LNG) to India.

Code-named 'Project Wonder', the North East Mediterranean Deepwater Concession in the Egypt Mediterranean Sea, has Shell as operator with 100 per cent stake and is estimated to hold close to 10 Trillion cubic feet of gas reserves.

"We are not paying Shell for buying the stake but have agreed to pay for its share of exploration cost in 2007 of 140 million dollars and a maximum of 40 million dollar for future cost beyond 2007," an OVL executive said here.

OVL will also not contribute toward the past costs (300 million dollars) incurred by Shell till October 1, 2006.

Besides carrying Shell in the development cost, OVL will also pay development bonus to Shell up to a maximum of 19.425 million dollars at the time of award of development lease by the local government and 35.343 million dollars production bonus at the time of start of commercial production.

"Shell has till now drilled five wells on the block and established presence of 1.9 Tcf of in-place reserves. We estimate at least 9.62 Tcf of reserves in the block, with an upside of 19 Tcf," the executive said.

Gas production from the discoveries is planned in 2012 with peak output of 330 million standard cubic feet per day. "The project has possibility of converting gas into LNG and exporting. We would like to take LNG to India," he said.

Petronas of Malaysia has pre-emption right -- it can match OVL's bid within 30 days.