Dealmaker

New Delhi, June 15: The cabinet today allowed ONGC-Videsh (OVL) to pick up a 33 per cent stake in an Egyptian deepwater gas block from Royal Dutch Shell in a deal valued at $380 million.

The northeast Mediterranean deepwater block, in which Shell holds 84 per cent, has reserves of around 15 trillion cubic feet of gas, according to a US government website. Malaysian PSU Petronas owns the remaining 16 per cent.

In April, petroleum minister Murli Deora met Egyptian President Mohammed Hosni Mubarak in Cairo and apprised him about OVL’s discovery of oil in the Suez offshore area. Deora sought Mubarak’s support for further OVL participation in the oil and gas hunt in Egypt. Deora also held talks with Egypt’s petroleum minister Amin Sameh Farmy during his four-day visit to Cairo in April.

Indian Oil’s proposal to participate in a crude oil pipeline project from the Mediterranean to the Red Sea coast was also discussed. This will encourage oil flow to Asia bypassing the Suez Canal.

Indian companies are also interested in petrochemical projects in Egypt. The delegation with Deora also discussed LNG sourcing and GAIL’s equity participation in liquefaction facilities in Egypt.

OVL is targeting 20 million tonnes of oil every year from its overseas fields by 2010. The thrust areas are Central Asia, Latin America and Africa.

OVL chairman R.S. Sharma sees a beginning in this direction with the recent acquisition of a 15 per cent stake from Shell in the BC-10 deepwater block in Brazil.