OVL to bid over USD 300 mn for Caspian Energy Group

In keeping with its recent overseas bids for foreign oil and gas assets, ONGC Videsh Ltd, the overseas arm of Oil and Natural Gas Corp (ONGC), is likely to bid over $300 million to buy Caspian Energy Group LLP''s interest in a Azerbaijan oil field.

OVL currently has assets in 14 countries including Myanmar, Vietnam, Russia, Egypt, Sudan and Australia but none in Central Asia.

OVL is bidding to buy Caspian Energy Group''s 51-per cent stake in Shivran Oil Operating Company that operates that Kyurovdag oil field in Azerbaijan. State Oil Company of Azerbaijan Republic (SOCAR) would hold the remaining 49-per cent stake in Shivran Oil Operating Company.

If its bid, code-named golden goose, succeeds, the acquisition of Caspian''s stake will mark OVL''s entry into the energy-rich Central Asian country Azerbaijan.

The Kyurovdag onshore oil field was discovered and first developed by the then USSR in 1955. Shirvan has been operating it since June 1996. The field is believed to hold an in-place oil reserves of 4.3 billion barrels of which an estimated 800 million barrels are recoverable.

The field currently produces 4,517 barrels of oil per day, is expected to produce a minimum of 146 million barrels between 2007 and 2030, 51 per cent of which go to OVL in the event of its being succcessful.

The production is projected to rise to 13,300 barrels per day in 2010 and thereafter start declining to reach 2,200 barrels per day in 2030. The field is well past its historical peak of 43,000 barrels per day of 1965.