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Tuesday, March 23, 2010

Reliance misses chance to bid for Venezuelan block

India’s most-valued company Reliance Industries (RIL) wanted to join Oil & Natural Gas Corp (ONGC)-led consortium that picked up a stake in Carabobo-1 oil block in Venezuela, but has missed the opportunity.
It is “too late” oil minister Murli Deora told reporters on the sidelines of the 6th Asian Gas Partnership Summit. Venezuela had awarded the $19-billion project to the ONGC consortium last month.

ONGC’s foreign arm ONGC Videsh (OVL) managing director RS Butola said the company is open to join hands with RIL and bid for other Venezuelan oil & gas assets in the future.

RIL recently expressed interest in joining the consortium, which was awarded a 40% stake in the Carabobo-1 oil block last month. Last year, RIL and ONGC were in talks to jointly bid for the project, but RIL later lost interest due to its preoccupation with proposed LyondellBasell acquisition.

The field, stated to have about 50-billion barrels of proven oil reserves, is important for RIL as it buys crude oil from Venezuela for its over 62-million-tonne-per-annum capacity refineries in Jamnagar. The complex refineries of RIL are suitable to process relatively-cheaper Venezuelan crude where margins are high.

Other members of the ONGC-led consortium are Indian Oil Corp (IOC), Oil India (OIL), Repsol YPF of Spain and Petroliam Nasional Bdh of Malaysia. ONGC holds an 11% stake in the field while other two state-owned oil firms, IOC and OIL, have 3.5% stake each. Repsol and Petroliam Nasional Bdh have 11% interest each in the project. The rest 60% stake is held by PdVSA, the national oil company of Venezuela.

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