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OVL to raise $3 bn for Kazakh acquisition
ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), plans to raise at least USD 3 billion in debt to part-fund acquisition of US energy giant ConocoPhillips' stake in a Kazazkhstan oilfield.
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New Delhi: ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), plans to raise at least USD 3 billion in debt to part-fund acquisition of US energy giant ConocoPhillips' stake in a Kazazkhstan oilfield.
"We can take USD 1.5 billion loan from our parent company (ONGC)... May be even USD 2 billion. The rest USD 3 billion will be raised in overseas debt," OVL Managing Director Dinesh K Sarraf said here.
OVL in November last year agreed to buy ConocoPhillips' 8.4 percent stake in Kazakhstan's biggest oilfield, Kashagan, for USD 5 billion.
Sarraf, who has steered OVL out of slumber the company had gone into post-Imperial Energy acquisition debacle, said borrowings will not be an issue as was demonstrated when the company raised USD 800 million for an acquisition in Azerbaijan at lowest cost ever.
OVL raised USD 300 million through a 5-year tenor unsecured bond and USD 500 million through a 10-year Note. The 10-year bond bears fixed coupon of 3.756 percent per annum while the 5-year note will bear 2.574 percent per annum.
"We have tested the markets and we are confident of raising funds for Kazakh acquisition," he said.
OVL, which earlier this month got government approval for the Kashagan acquisition, is awaiting nod from Kazakhstan government to close the deal.
Kazakhstan has publicly stated that it will convey its decision by July.
OVL had gone into a shell after its January 2009 acquisition of Russia-focused Imperial Energy for USD 2.12 billion was severely criticised by many, including the Comptroller and Auditor General (CAG), as output and reserves lagged projections. Output at about 12,000 barrels per day was short of 35,000 bpd projected at the time of acquisition.
Sarraf after taking over as Managing Director in September 2011 turned around OVL into an aggressive acquirer, clinching a USD 1.001 billion deal to buy US energy major Hess Corp's stake in an Azerbaijan oilfield and USD 5 billion acquisition of ConocoPhillips' stake in a Kazakhstan oilfield.
Kashagan, a Caspian Sea field set to produce 370,000 barrels of oil a day, is to start output by September, eight years later than initially planned and with costs nearing USD 46 billion, double the early estimates.
While OVL got nod of the parters for acquisition of ConocoPhillips stake at end of January, Kazakh government has time till July to approve the transaction.
Exxon Mobil, Royal Dutch Shell, Italy's Eni, Total of France and KazMunaiGaz each hold 16.8 percent of Kashagan. Japan's Inpex Corp has 7.56 percent.
PTI
"We can take USD 1.5 billion loan from our parent company (ONGC)... May be even USD 2 billion. The rest USD 3 billion will be raised in overseas debt," OVL Managing Director Dinesh K Sarraf said here.
OVL in November last year agreed to buy ConocoPhillips' 8.4 percent stake in Kazakhstan's biggest oilfield, Kashagan, for USD 5 billion.
Sarraf, who has steered OVL out of slumber the company had gone into post-Imperial Energy acquisition debacle, said borrowings will not be an issue as was demonstrated when the company raised USD 800 million for an acquisition in Azerbaijan at lowest cost ever.
OVL raised USD 300 million through a 5-year tenor unsecured bond and USD 500 million through a 10-year Note. The 10-year bond bears fixed coupon of 3.756 percent per annum while the 5-year note will bear 2.574 percent per annum.
"We have tested the markets and we are confident of raising funds for Kazakh acquisition," he said.
OVL, which earlier this month got government approval for the Kashagan acquisition, is awaiting nod from Kazakhstan government to close the deal.
Kazakhstan has publicly stated that it will convey its decision by July.
OVL had gone into a shell after its January 2009 acquisition of Russia-focused Imperial Energy for USD 2.12 billion was severely criticised by many, including the Comptroller and Auditor General (CAG), as output and reserves lagged projections. Output at about 12,000 barrels per day was short of 35,000 bpd projected at the time of acquisition.
Sarraf after taking over as Managing Director in September 2011 turned around OVL into an aggressive acquirer, clinching a USD 1.001 billion deal to buy US energy major Hess Corp's stake in an Azerbaijan oilfield and USD 5 billion acquisition of ConocoPhillips' stake in a Kazakhstan oilfield.
Kashagan, a Caspian Sea field set to produce 370,000 barrels of oil a day, is to start output by September, eight years later than initially planned and with costs nearing USD 46 billion, double the early estimates.
While OVL got nod of the parters for acquisition of ConocoPhillips stake at end of January, Kazakh government has time till July to approve the transaction.
Exxon Mobil, Royal Dutch Shell, Italy's Eni, Total of France and KazMunaiGaz each hold 16.8 percent of Kashagan. Japan's Inpex Corp has 7.56 percent.
PTI
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