Saturday, September 11, 2010

ONGC, Indian Oil Share Sales May Raise $4.1 Billion for Indian Government

India may raise as much as 190 billion rupees ($4.1 billion) selling shares in Oil & Natural Gas Corp., the country’s biggest energy explorer, and Indian Oil Corp., to help cut its budget deficit. Indian Oil, the nation’s second biggest refiner, may raise a further 100 billion rupees by selling fresh equity to help it fund a new crude oil processing plant it is building, Oil Secretary S. Sundareshan told reporters in Mumbai today.

“The plan is to complete the disinvestments before the end of the fiscal year,” Sundareshan said. “It will be Indian Oil followed by ONGC. In the last quarter, hopefully.”

Prime Minister Manmohan Singh wants to raise 400 billion rupees from asset sales in the year ending March 31 to help fund the construction of roads, ports, hospitals and schools. The government said in January it can sell shares in as many as 68 companies as it seeks to shrink its budget deficit to 5.5 percent of gross domestic product this fiscal year from an estimated 6.9 percent last year.

Indian Oil is building a refinery in Orissa state with an annual processing capacity of 15 million tons. The refiner plans to spend 145 billion rupees in the financial year ending March compared with 135 billion rupees last year to increase capacity, Serangulam V. Narasimhan, finance director, said Jan. 6.

ONGC will complete the valuation on BP Plc’s assets in Vietnam in a few weeks as it seeks to buy them in partnership with Vietnam Oil & Gas Group, Sundareshan also said.

State owned ONGC is considering all options for buying partner BP’s stake in a Vietnam gas field, Chairman R.S. Sharma said July 22. The London based company, which is raising funds to pay for the Gulf of Mexico oil spill, agreed July 20 to sell fields in the U.S., Canada and Egypt to Houston based Apache Corp. for $7 billion and plans to dispose of assets in Pakistan and Vietnam.

Bloomberg reporter Natalie Obiko Pearson can be reached at npearson7@bloomberg.net.



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