OVL may invest 1.5 billion for blocks in Ecuador

Ecuador could be ONGC Videsh Ltd8217;s next big catch with the largest one-time investment by an Indian firm abroad. Although aware that it...

Ecuador could be ONGC Videsh Ltd8217;s next big catch with the largest one-time investment by an Indian firm abroad. Although aware that it may have to shell out 1.5 billion in one go, OVL has decided to bid for EnCana Corp8217;s producing blocks, either with a foreign partner or alone.

Though OVL8217;s endeavor would be to identify a foreign partner to jointly bid for the EnCana8217;s share, in case a 8220;tie up with the partners does not become feasible within the time limit available, then OVL would bid alone8221;.

The reason for OVL8217;s desperation is that the acquisition would provide India 900,000 barrels per day as well as an opportunity to expand its operations in Latin America that accounts for 10 per cent of world8217;s proven oil reserves.

EnCana8217;s 2003 production in Ecuador averaged 62,300 bpd and the current production is reportedly about 90,000 bpd, which is slated to reach 115,000 bpd in 2005.

As on July 1, EnCana8217;s share of equity reserves was estimated at 329 million barrels with proven reserves pegged at 217 million barrels. Additional possible and risked exploration reserves are estimated in excess of 267 million barrels.

EnCana has put on offer its equity in five oil blocks, of which four are producing, and 36.3 per cent stake in the 500-km Oleoducto de Crudos Pesados crude pipeline that has a capacity of 450,000 barrels per day.

The reason for the share sale is that it recently acquired US firm Tom Brown for 2.35 billion and plans to divest its oil assets in Ecuador to cover the debt taken on this purchase. The share transfer would involve sale of the three holding entities through which it owns these shares.

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EnCana8217;s 100-percent owned Tarapoa block produced an average of 59,785 bpd in April 2004. The 2004-05 development plan includes the drilling of 21 wells in the undeveloped eastern portion of the 90,000-acre block. It has a 40 percent non-operated interest in Block 15 that entitles it to about 30,000 bpd, after royalties. Production from the block averaged 42,056 bpd in April 2004.

OPEC raises supply by 1 mn bpd, oil rises

	nbsp;	8226; VIENNA/LONDON: OPEC on Wednesday lifted oil supply quotas by one million barrels a day, 4 per cent, in a renewed bid to force down stubbornly high world crude prices. The pact is designed to underscore the Organisation of the Petroleum Exporting Countries8217; intent on exerting downward pressure on prices that last month topped 49 a barrel for US crude, a record. Meanwhile, oil prices rose on Wednesday after US weekly data showed crude stockpiles falling to their lowest in six month. New York light crude rose 56 cents to 44.95 after touching a two-week peak of 45.30 as news of the tighter crude supply picture overrode OPEC8217;s attempt to calm the market with a hike in official output. London brent crude rose 57 cents to 41.75. 8212; Reuters	nbsp;