After failing in Africa, ONGC now eyes Canada

After losing out to China in Uganda and Algeria, public sector Oil and Natural Gas Corporation (ONGC), is now setting its eyes towards Canada to acquire energy assets.

The Indian oil explorer is now said to be seeking to buy oil-sands assets worth $1 billion in Canada that can produce about 10,000 barrels of oil a day, according to a Bloomberg report today.

This new round of sourcing comes after ONGC lost out last month to CNOOC, China's third-largest oil company, in its bid to acquire a 50-per cent interest in Uganda's oil fields, (See: ONGC once again loses out to China for oil assets in Africa)  and also losing out to the same firm for an Algerian oilfield in January 2010. (See: ONGC loses Algerian oilfield bid to China's CNOOC-led consortium)

Citing sources, the paper said that ONGC is seeking to buy oil-sands assets in Canada and is currently evaluating the finances of a Canadian field.

Canada's oil sands resource is one of the world's largest oil deposits, considered second in size to those found in Saudi Arabia. However, extraction of the heavy crude from oil sands poses many technological challenges.

With oil majors using production technology known as 'steam-assisted gravity drainage' (SAGD) to recover heavy oil buried deep beneath the earth, global oil companies have shown a keen interest in the past few months in acquiring oil and gas assets in Canada.

In January, ConocoPhillips and Total SA announced a multi-billion dollar expansion of Surmount oil sands project in Canada, bringing into limelight the huge potential of Alberta's oil sands resources to meet the future energy needs of North America. (See: ConocoPhillips, Total to quadruple production from Canada's Surmount oil sands)