ONGC looks to Chevron, Total, Shell for block swaps

Mumbai: State-run oil explorer Oil and Natural Gas Corp. Ltd. (ONGC) is in talks with Chevron Corporation, Total and Royal Dutch Shell to swap oil block stakes.

"ONGC is talking to Chevron, Total and Shell for equity swap with their blocks," the company''s exploration director D. K. Pande said, adding that the Indian explorer was offering stakes in four or five of the 190 blocks it owns.

Oil and Natural Gas Corp. Ltd, India ''s second most valuable company, with a market cap of $48 billion, also planned to spend $10.3 billion in acquiring and developing overseas assets by 2012, Pande told a news conference.

"We offer them stakes provided they compensate by reciprocating," Pande said, adding, "We will tie up with anybody that can add value to our properties."

Meanwhile, ONGC Videsh, the company''s overseas arm of the company, plans to step up investment in acquisition and development of overseas assets to Rs42,000 crore by 2012 from Rs25,500 crore in the previous five years.

"Our 11th five-year plan outlay is Rs42,000 crore which we will spend on acquisitions and development of existing properties," ONGC Videsh managing director R.S. Butola said.

ONGC is eyeing a 51 per cent stake in a producing oil field in Azerbaijan. Butola said the company was hopeful it would get some assets there and was talking to Azerbaijan ''s state-run oil company Socar.

The company is pursuing opportunities in Africa , the Middle East, Russia, Latin America and Kazakhstan to secure more oil assets.

ONGC''s quarterly net profit, meanwhile, fell to Rs2,682 crore ($657 million) from Rs3,086 crore a year ago.

ONGC, which produces nearly 80 per cent of India ''s crude, is required to sell crude oil and gas from its domestic output to state-run refiners at heavy discounts in order to keep retail fuel prices low.

ONGC said its subsidy to state-run refiners rose by 42.4 per cent to Rs17,024 crore for 2006-07. The company sold its crude at a discount of $22.11 per barrel to refiners in the full year to March 2007, up from $17 a barrel the previous year. It said it had earned an average $44.22 per barrel in 2006-07.