State-owned Oil and Natural Gas Corp (ONGC) today said its plans to acquire shale gas and other hydrocarbon assets in US may be hit because of its investment in Iran and Sudan.
“We are present in Iran and Sudan. Because of this there are restrictions. We are trying to find ways to circumvent that,” ONGC Chairman and Managing Director Sudhir Vasudeva told reporters here.
ONGC Videsh Ltd,the firm’s overseas investment arm,has zeroed-in on at least couple of shale gas properties in US but has not been able to close the deal due to its investment in countries that Washington has imposed economic sanctions on.
OVL has invested in oil and gas fields in four countries high on US sanction list — Iran,Myanmar,Syria and Sudan. Of these,its investments in Iran are the ones that is stalling closure of any shale gas deal.
“There could be problems for investments in the US,” he said. “For any opportunity in the USA,we will have to address the law of the land.”
The company has taken legal opinions which warn of consequences like forfeiture of its entire investment in an American or Canadian shale gas property should Washington implement its own law that calls for imposition of sanctions on any firm investing more than USD 20 million in Iran’s petroleum or natural gas sector in any given year.
“We have a gas discovery in Iran and that has to be taken forward,which requires millions of dollars. We are weighing the pros and cons of that investment,” Vasudeva said. OVL has since 2003 invested about USD 87.875 million in Farsi block in Iranian Persian Gulf and has discovered a giant Farzad-B gas field.
The field,which holds 12.5 trillion cubic feet of reserves may require up to 6 billion in producing 1,100 million standard cubic feet a day by 2016/17. OVL has so far not signed a contract committing to invest the Iranian field.
It has 25 per cent interest in the producing Greater Nile Oil Project of Sudan which it bought for USD 720 million. It also has 24.125 per cent stake in the Block 5A in the African nation.
The firm holds 33.33 to 37.5 per cent interest in four Production Sharing Contracts (PSCs) comprising 36 producing fields in Syria,and 20 per cent interest in A-1 and A-3 gas fields of Myanmar.
Sources said among the properties OVL has looked at include US major ConocoPhillips’ oil sand assets in Canada but nothing has been finalised as yet.
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