Acquisition Of Upstream Assets Worldwide By Indian Companies Environmental Sciences Essay

An acquisition or coup d’etat is the purchase by one company of commanding involvement in the portion capital, or all or well all of the assets and/or liabilities, of another company. A coup d’etat may be friendly or hostile, depending on the offer or company ‘s attack, and may be effected through understandings between the offer or and the bulk stockholders, purchase of portions from the unfastened market, or by doing an offer for acquisition of the offer ‘s portions to the full organic structure of stockholders. The Indian sub-continent has been undergoing an accelerated growing in the recent yesteryear. Today, India is the 5th largest energy consumer in the universe. While the universe consumes 12000 million metric tons of oil equivalent ( mtoe ) of energy resources, India consumes 4.4 % of the universe sum ( 524.2 mtoe ) . Global ingestion of primary commercial energy ( coal, oil & A ; natural gas, atomic and major hydro ) has grown at a rate of 2.6 % over the last decennary. In India, the growing rate of demand is about 6.8 % , while the supply is expected to increase at a compounded one-year growing rate ( CAGR ) of merely 1 % .

Of the entire primary energy ingestion basket, oil and gas constitute 45 % portion in the entire energy basket mix. It is projected that even if we exploit hydropower possible to the fullest, even if there is a 40 fold addition in the part of renewable resources and a 20 fold addition in the part of atomic power capacity, by the twelvemonth 2031-32, fossil fuels will go on to busy a important portion in the energy basket ( 74 % to 85 % of the energy mix ) . The size of the oil and gas industry in footings of turnover bases at USD 160 bn. The value of rough oil and LNG imports into India in 2010/11 were around US $ 98 billion. About 78 per cent of India ‘s crude oil ingestion is met from imports ( largely of rough oil ) , while approximately 25 % of natural gas ( including LNG ) ingestion comes from imports. It is estimated that in the coming old ages, the import dependence for rough oil entirely would make above 90 % degree.

As per the Integrated Energy Policy of the Planning Commission, Government of India, India ‘s energy demand is expected to turn quadruple from 433 Million Tonnes of Oil Equivalent ( MTOE ) to around 1,856 MTOE by 2032. However, India depends mostly on imports with over 75 % of oil and 16 % of gas ingestion being imported. The Government of India is acute to increase per capita ingestion of energy to raise life criterions in the state.

Higher economic growing is driving income growing, which in bend is driving up industrial investing and fuel ingestion. In general, demand exceeds supply and there is a broad-based energy deficit, which is either met by imports or remains unmet.

So there are few grounds for the Overseas assets acquisition.

Security abroad militias for the state

Attractive chances in rich petroliferous basins

Global spread will assist balance hazard

Insulation from monetary value fluctuations

Research Objective

For any state in today ‘s epoch energy security is strategically of import for its growing and development. Developing states like India- A non OPEC state, acquisition has become utterly of import for their higher economic growing and impulsive income, which in bend is driving up industrial investing and fuel ingestion.

This survey would assist in developing a stiff cognition about the demand of the Overseas Acquisition by India, the factors which affect these international trades. Analysis of trades done by Indian Oil Companies Worldwide. Besides,

To measure growing of acquisition in the oil sector.

On what footing the selected states are choosen for command and Acquisition of assets by Indian companies, besides covering the geopolitics in international market with states like China.

To do a study of plus acquired worldwide by India which can assist in farther probe.

Research Methodology

It would be covering with a qualitative research method from the available informations aggregation from different available beginnings which gives an mentality for universe scenario for upstream investing & A ; hinderances which give their part in India ‘s energy security.

This is a descriptive type of survey and will be based in secondary informations.

Literature Review of the articles and research studies available in textual signifier, trade diaries, and besides the articles and studies available on the company websites and by consultancies, the web sites of the official authorities bureaus.

Analysis of the assorted studies and articles and highlighting of the abstracts related to the research subject. Updates of the latest Acquisitions.

Litreature reappraisal

India is rich in civilization, diverseness and in population excessively. But when it comes to natural resources, the image is non that colourful. This famine in natural militias has non stunted our ingestion or our accelerated growing in any manner. In order to bridge the immense spread between production and ingestion, and achieve all the ambitious programs proposed by the National Electricity Policy the authorities needs to guarantee sufficient supply of energy resources under all fortunes and do the state energy secure. This can be achieved by increasing our resource base.

Geting energy assets abroad is the most reasonable thing to make to accomplish energy security. As portion of its energy security scheme, India has forged new ties with Russia, Iran and China and built partnerships with Burma and Venezuela. The state has besides carefully entered into concerted relationships with several oil bring forthing states in Africa and in the Middle East. India has besides allowed public sector companies such as ONGC and OIL to procure ownership of oil and gas Fieldss and companies overseas. ONGC has acquired equity bets in the oil Fieldss in Iran, Iraq, Sudan, Libya, Angola, Burma, Russia, Vietnam and Syria. India is looking at Kazakhstan as an of import emerging exporter of oil and gas. Kazakhstan is among the top 10 states in the universe in footings of explored oil and gas militias. The state depends significantly on abroad support to develop these resources, which offers investing chances to India.

The Pioneer and The Followings

The game of abroad energy acquisitions began with the formation of ONGC Videsh Limited ( OVL ) in 1989. In its pursuit for energy security India has been puting in oil assets abroad. India ‘s grim March overseas in hunt of oil assets has been led by ONGC Videsh Limited ( OVL ) , a entirely owned subordinate of Oil and Natural Gas Corporation Limited ( ONGC ) whose primary concern is to prospect for oil and gas land areas abroad.

OVL made a modest start with the geographic expedition and development of the Rostam and Raksh oil Fieldss in Iran and set abouting a service contract in Iraq. Subsequently OVL achieved a major discovery in 1992 in Vietnam with the find of two major free gas Fieldss, viz. LanTay and LanDo, in partnership with British Petroleum and Petro-Vietnam.

In 2001, OVL acquired 20 % interest in Sakhalin-1 undertaking in the far E of Russia with an investing of over USD 2.1 billion – the individual largest Foreign Direct Investment made by an Indian company at that clip.

In 2003, OVL acquired 25 % interest in Sudan ‘s Greater Nile Oil Project ( Block 1, 2 and 4 ) which produces 280,000 barrels per twenty-four hours. In April 2008, OVL signed a joint venture understanding with Petroleous de Venezuela SA ( PDVSA ) to take 40 % interest in the San Cristobal oilfield located in Orinoco Heavy Oil belt of Venezuela ; Under the understanding OVL and PdVSA will develop the field from its current production degree of 20,000 bbl/d to 40,000bbl/d.

The same twelvemonth, OVL completed the acquisition of the the UK based Imperial Energy Plc for 1.3 billion lb ( USD 1.9 billion ) .The acquisition of Imperial, the Leeds-based house that has oil bring forthing blocks in Tomsk part of western Siberia in Russia and Kastanai in northcentral Kazakhstan, was the biggest abroad of all time acquisition by OVL.

The company presently maintains a combination of bring forthing, discovered and geographic expedition assets, working as operator in 18 undertakings and joint operator in 2 undertakings. OVL ‘s cumulative investing overseas in 44 Oil & A ; Gas undertakings in 18 states, spread over Vietnam, Sudan, Russia, Iraq, Iran, Myanmar, Libya, Cuba, Colombia, Nigeria, Nigeria Sao Tome JDZ, Egypt, Brazil, Congo, Turkmenistan, Syria, Venezuela and United Kingdom has crossed USD 7.5 billion.

OVL produces hydrocarbons from its 7 assets, viz. , Russia ( Sakhalin-I ) , Syria ( Al-Furat Project ) , Vietnam ( Block 06.1 ) , Colombia ( Mansarover Energy Project ) , Sudan ( Greater Nile Oil Project and Block 5A ) and Venezuela ( San Cristobal Project ) . Balance 5 undertakings are in development stage and 25 are in the geographic expedition stage. OVL ‘s international oil and gas operations produced 8.802 MMT of O+OEG in 2007-08 as against 0.252 MMT of O+OEG in 2002-03. ONGC Videsh gets over 3 million metric tons of oil from Sudan as its portion of the production from the Greater Nile undertaking. Not all its investings have yielded oil. ONGC Videsh Ltd ‘s ( OVL ) , which had picked up a 24.5 % take parting equity in the block from OMV in May 2004, has had to go out Sudan ‘s Block 5B. and compose off $ 89.50 million investing in the block following the company ‘s proclamation it was drawing out of the land area because of its dim prospectivity.

Other province owned houses

The Government is promoting all the province owned public sector companies to sharply prosecute equity oil and gas chances overseas. The Reserve Bank of India ( RBI ) allowed navratna PSUs to put in unincorporated oil companies abroad under the automatic path, a move that has helped these companies get oil and gas blocks overseas.

Therefore, in add-on to OVL, Indian Oil Corporation Ltd ( IOC ) , Bharat Petroleum Corporation Ltd ( BPCL ) , Hindustan Petroleum Corporation Ltd ( HPCL ) , Gas Authority of India Ltd ( GAIL ) and Oil India Ltd ( OIL ) have been reconnoitering for chances across the Earth to get geographic expedition and blocks. These companies have together invested a sum of Rs 34 billion in abroad undertakings. State-owned Oil India ( OIL ) in pool with Indian Oil, has so far acquired equity interest in oil assets in states including Nigeria, Gabon, Libya, Yemen and Iran. OIL India has sought the authorities blessing for quadrupling the cap on its abroad investing to $ 300 million. OIL is be aftering to offer for some of the assets being sold in Commonwealth of Independent States ( CIS ) and West African states.

IndianOil has signed Production Sharing Agreements for Blocks 82 & A ; 83 in Yemen that were approved by the Yemeni Parliament. IndianOil holds 15 % take parting involvement in each block along with other spouses, viz. , Medco Energi, Kuwait Energy and OIL. In Libya, an Exploration & A ; Production Sharing Agreement was signed for onland geographic expedition of Areas 95- 96 in Libya ( awarded before ) and ratified by the General People ‘s Committee of Libya.

IndianOil holds 25 % take parting involvement in the block along with other spouses, viz. , Sonatrach and OIL. The National Iranian Oil Company has conveyed its credence of commerciality of the gas find in Farsi block ( awarded before ) in which IndianOil holds 40 % take parting involvement along with other spouses, viz. , OVL and OIL.

BPCL, which presently holds equity in nine geographic expedition blocks in India, besides holds 12.5 per centum equity in Oman ‘s Block 56, 20 per centum each in two geographic expedition blocks in Australia, one in Timor, Australia ( 25 per cent ) and in the 48/1B and 2C blocks in the North Sea with a 25 per cent involvement.

HPCL has been was reconnoitering for discovered Fieldss, including those in Australia, Philippines, Indonesia, Egypt, Canada and New Zealand. HPCL, in pool with E & A ; P spouse companies, presently owns abroad oil equity in one block each in Oman and Australia and 2 blocks in Egypt in pool.

GAIL has set up a entirely owned subordinate, viz. , GAIL Global ( Singapore ) Pte. Ltd. To pull off investings abroad. GAIL has established a presence in the CNG and City Gas sectors in Egypt through equity engagement in three Egyptian companies: Fayum Gas Company SAE, Shell CNG SAE and National Gas Company SAE. Gail has besides acquired a interest in China Gas Holding to research chances in the CNG sector in mainland China. In Myanmar, it holds 10 personal computer interest in both A1 and A3 geographic expedition & A ; production ( E & A ; P ) blocks. ONGC Videsh Ltd and GAIL India along with their South Korean spouses Daewoo Corp and Korea Gas Corp may put $ 3.73 billion in conveying to production natural gas they have found off Myanmar.

Private oil companies

In add-on, private companies such as Reliance Industries Limited, Essar and Videocon are besides puting on abroad E & A ; P assets.

RIL has been purchasing assets across India, Columbia, Yemen, Oman, East Timor, Egypt and Russia. It has sbeen awarded 14 blocks with an acrage of 94.000 square kilometres spread over seven states. These includes two blocks in Yemens and three blocks in Peru.

Essar Exploration & A ; Production ( EEPL ) , has become the first Indian oil company to come in Australia by purchasing two offshore crude oil geographic expedition blocks.