Oil India

India Infoline News Service | Mumbai |

For FY14, the company targets to produce 3.95mn tons of crude oil and 2,740scm of natural gas.

Domestic E&P
  • For FY14, the company targets to produce 3.95mn tons of crude oil and 2,740scm of natural gas.

  • Block in Mizoram which was allocated in NELP VI – pre-drilling activities has been completed and 5 locations for drilling of wells have been indicated. Contracts for drilling will be awarded in the near future.

  • KG Basin block awarded in NELP VI – pre-drilling activities are in progress and the company has indicated six locations for drilling of wells. MWP commitment is for 12 wells and the first well is expected to be drilled shortly.

  • Gulf of Mannar Cauvery Basin block awarded in NELP VII round – data processing activities are progressing well.

  • The company expects to see robust growth in gas production over the next couple of years.

  • Current cost of gas production is US$3.06/mmbtu and the company estimates PAT increase of Rs2.2bn for every US$1/mmbtu increase in gas prices.

  • Law and order situation in Assam is improving and the company expects a turnaround in production in the next year.

Overseas E&P
  • With regards to Mozambique, post the deal with Videocon the company will have a 5% stake and the total investment (equity + debt) in the block is envisaged to be US$2.3bn for Oil India. The in-place resource at the block is 84tcf. 2 trains of LNG will be set up by CY18 and every year one LNG terminal will be added taking the total capacity to 30mn tons by 2022-2023. LNG transportation cost from Mozambique to India is estimated to be at US$0.7/mmbtu as compared to US$2.9/mmbtu from US to India.
  • Current production at the Carrizo shale block, where Oil India has a 20% stake and possesses 12,300acres net, is about 700barrels of oil equivalent per day. The revenue from the block during FY13 was US$3.9mn.
  • Production at the Carabobo block in Venezuela started on 27th December 2012. Current production is about 1,800barrels per day and is expected to scale up to 90,000barrels by 2015 and 400,000barrels by 2017-18. The project will require installation of a crude upgrader to improve the viscosity of the crude extracted.
  • In Libya, where the company has 25% participating interest in blocks 95 and 96, well No 1 is producing 3,050barrels of oil per day. In well No 3, 440 feet of gas pay has been encountered.
  • For FY14, the company has lined up a capex of Rs35.8bn of which about 50% will be spent on exploration and development.
Others
  • Oil India is planning to fund its Mozambique acquisition by leveraging its strong balance sheet and raising debt to the tune of 90-95% of acquisition cost.
  • With regards to diversification, the company has set eyes on LNG business as one of its key areas for future growth. Also the company aims to have exposure to petrochemicals and refinery businesses.
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