November 02, 2001

'20'

    Shri Ram Naik, Minister of Petroleum and Natural Gas speaking at a reception organised by M/s J.P.Morgan to celebrate ONGC Videsh Ltd’s (OVL) acquisition of a stake in the prestigious Sakhalin-1 project in Russia expressed his happiness that the project was progressing well. Speaking on the occasion Shri Naik stated that this project was vital for OVL as well as for the country and was a major step towards acquiring equity oil abroad to enhance the oil security for the country. The estimated investment of about USD 1.75 billion (Rs. 8400 crores at current exchange rate) is the largest investment committed by any Indian corporate body overseas. This project will help the country to acquire about 2.5 – 5.0 Million Metric Tonnes Per Annum (MMTPA) and about 8 Million Standard Cubic Metre Per Day (MMSCMD) of gas.

    Speaking on the occasion, Shri Naik mentioned that the operator Exxon-Mobil had announced the commerciality of the project on 29.10.2001, two months ahead of schedule and development plan would be finalised soon. He also highlighted that the crude production profile for the project has gone up by 25-30%, which would further improve the economics of the project. Shri Naik mentioned that the project economics at the time of decision-making was attractive even after considering the increased premium of USD 225 million (Rs. 1080 crores at current exchange rate) and now with increase in the production profile, the attractiveness of the project has enhanced further. Shri Naik appreciated the skill and experience of the advisers as well as OVL in securing the stake in the project.

    Shri Naik commended the efforts of everybody involved in securing the stake in Sakhalin-1 project for OVL and hoped that OVL would continue to strive to secure such opportunities to enhance oil security for the country.