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ONGC loses Iraqi oilfield to China
NEW DELHI, DEC 12 (AGENCIES):
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Published on 12 Dec. 2009 11:48 PM IST
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India’s quest for acquiring overseas oil and gas assets received yet another setback, with rival China walking away with the giant Halfaya oilfield put on the block by Iraq. A consortium of domestic oil explorers, ONGC Videsh Ltd and Oil India Ltd, and Turkish Petroleum Corporation, has lost its bid for development rights in the giant Halfaya oilfield to a grouping led by China National Petroleum Corporation (CNPC). As in the past, the Chinese bid was more aggressive than the Indian one to gain a foothold in Iraq, which has world’s third-largest crude oil reserves.The oilfield had been offered by Iraq in its latest auction round that took off on Friday. Iraq decides the winning bidders based on two parameters -- the dollar-per-barrel fixed remuneration for developing the field and the targeted plateau production. The fixed remuneration has an 80% weight in the bid, which prevents bidders from promising unrealistic production targets. According to DNA report, the Indian consortium, led by ONGC Videsh Ltd had placed a bid with a remuneration of $1.76 per barrel with a peak production of 5,50,000 barrels a day. It was outbid by the consortium of China National Petroleum, France’s Total SA and Malaysia’s Petronas, which quoted a much lower fee of $1.4 per barrel and peak output of 535,000 barrels. The field is estimated to hold around 4.6 billion barrels of crude oil. The field’s minimum peak output is seen at 4,00,000 barrels per day, with a production life of 13 years. Halfaya is considered one of the five giant fields awaiting development. The cost of developing the field could be in excess of $10 billion. Iraq is offering 15 undeveloped fields in its second licensing round. The battle for Halfaya witnessed a four-cornered-contest. The other two groups were a consortium of Norway’s Statoil ASA and Russian OAO Lukoil and another comprising Italy’s Eni, Angola’s Sonangol, China’s CNOOC Ltd, Korea Gas Corporation and US explorer Occidental Petroleum.

 
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