India’s overseas investment arm of Oil and Natural Gas Corp ONGC Videsh might be looking into farming into Tullow Oil assets in Ghana and Kenya according to news reports by online.wsj.com attributed to ONGC’s director of exploration Anil Bhandari and Reuters who quote an anonymous source.
The need to buy the assets is necessitated by the growing demand by India for oil especially in what the source calls politically less countries as deemed by the world’s fourth largest oil consumer.
Other geographical locations in the eyes of ONGC include North America, Canada and Mexico.
This revelation comes even as Africa Oil the joint partner with Tullow in blocks 10BB and 13T saying it might be relinquishing about half of its interest in Kenya in the next two years to recover its exploration costs.
In June Tullow Oil and Africa Oil indicated they might be preparing for a farm out as they seek to bring on a partner to help develop Lokichar Basin reserves currently pegged at 1.29 billion barrels according to the latest estimates by the Canadian explorer.
In May a Citibank report had warned that Tullow Oil could be entering into dangerous levels of debt that had the levels to delay oil production in East Africa if a farm does not happen a view according to experts may push the explorer into selling some of its interest.
There has however been no timeline to date by both Tullow Oil and Africa Oil as to when such a farm-out may occur.
National explorer National Oil Corporation of Kenya has also indicated it will back in blocks 10Bb and 13T part of the production sharing agreement that allows the government to participate should any discovery be made by acquiring some equity on the block in question despite not having invested in exploration.