Videocon Industries Ltd, which is partnering Australia’s Oilex NL, said it will spend $1 billion to look for reserves in West Asia, Indonesia and Australia.
The investment, planned over the next five years, will boost production from 50,000 barrels a day, Videocon Chairman Venugopal Dhoot said on Wednesday, without giving a target. The Mumbai-based company earns as much as $120 million profit each year from its oil business, he said, without being more specific.
Videocon, which also makes consumer electronics, plans to buy rivals overseas and expand the oil business as part of a strategy to increase revenue to $10 billion by 2012, Dhoot said. Videocon posted revenue of $1.9 billion and in the 12 months ended September 30, 2006.
“We’ve made mergers and acquisitions our main issue,” Dhoot said. “If you want to grow exponentially, you can only grow by mergers and acquisitions,” he added.
Videocon, which made an unsuccessful bid to purchase Daewoo Electronics Corp, South Korea's third-largest electronics maker, earlier this year, plans to renew its offer given an opportunity, Dhoot said.
“We are quite confident when next time they sell, we will try our level best to get it,” he said.
Creditors of Daewoo Electronics in January rejected a bid by Videocon to reduce its 700 billion won ($750 million) offer for Daewoo. The plan for the sale was subsequently scrapped.
Videocon stock has declined 20 percent this year, compared with a 13 per cent increase in the 30-stock benchmark sensitive Index, Sensex.