ONGC has announced that a 50:50 joint venture company between ONGC Nile Ganga BV, and Fulin Investments SARL, a subsidiary of China National Petroleum Company International has jointly entered into an agreement to acquire Petro-Canada''s entire shares in four production sharing contracts (PSCs) — amounting to 33.33 per cent in Ash Sham; 37.5 per cent in Dier EZ Zor; 37.5 per cent in Dier EZ Annex IV; and the 36-per cent gas utilisation agreement of 36 producing fields in Syria.

ONGC Nile Ganga BV is a fully owned subsidiary of ONGC Videsh Ltd (OVL), the overseas armof ONGC. OVL is already working in Syria in another exploration block, XXIV, in partnership with IPRMEL and this acquisition would help the ONGC Group to expand its portfolio in Syria

The fields have been in production for over the last 15 years. Petro-Canada holds its interest in these PSCs through its subsidiaries.

The acquisition will be completed after the approval of the Syrian government. Shell holds the remaining interests in the four PSCs. A1-Furat Petroleum Company is the operator for the asset, whose shares are held by Shell (31.25 per cent), SPC(50 per cent) and Petro-Canada (18.75 per cent). The purchase is retroactive from July 01, 2005.

The fields under this asset are the major oil producers in Syria and produced oil at an average rate of 187,350 barrels per day during H1 2005. The remaining recoverable reserve potential of the asset is estimated to be more than 300 million barrels of oil.

According to Subir Raha, chairman, ONGC Group of companies, the joint acquisition by ONGC and CNPC is a pace-setter for both the companies. Though ONGC and CNPC have been working together in the Greater Nile oil project in Sudan, this is the first time that they have joined hands to acquire an oil asset together and the acquisition opens a wholly new set of opportunities for both companies to collaborate on the oil and gas value chain.