India (ONGC) investing to alleviate dependence of foreign fuel (IFN)

Nov.18.05 | About: India Fund (IFN)

India's biggest company, Oil and Natural Gas Corp (ONGC) -- not listed on U.S. exchanges, but is the third-largest holding of the U.S. traded The India Fund (ticker: IFN) -- is preparing to invest up to US$25 billion to satisfy government demands that it alleviate the country’s dependence on foreign fuel supplies. The aggressive investment plans are aimed at increasing the group’s production from 1.1 million barrels per day (bpd) of oil and gas equivalent to more than 1.5 million bpd by 2011. By 2020 ONGC wants to have in place oil and gas reserves of 87.6 billion barrels, double the current figure and source at least 400,000 bpd from assets outside India.

From The Times Online UK:

Cairn Energy, the UK-based FTSE 100 company that last year made India’s biggest oil discovery in 22 years, is often mooted as a likely takeover target. ONGC already has a 30 per cent stake in Cairn’s Rajasthan oilfields, which are scheduled to produce at least 150,000 bpd from 2008.

ONGC is hoping to use its dominant position in India to woo the world’s biggest oil companies, such as BP, in return for access to their oil and gas assets in other parts of the world. The oil majors are yet to move into India, whose billion-strong population is experiencing rampant economic growth.

Despite being promoted as a publicly listed corporation — 14 per cent of its shares are on Bombay’s stock exchange — ONGC remains Government-controlled. India’s Government has a direct 74 per cent stake and two Government-owned entities hold 12 per cent.

Coverage of this story at: Times Online UK, Sify India, Financial Express India, Reuter's India.