KOLKATA (miningweekly.com) – Uncertainties over its assets in Venezuela and Iranian projects will push back the listing of ONGC Videsh.
The wholly owned overseas investment arm of Indian national oil exploration and production (E&P) major, ONGC Limited has maintained that with its ventures in Venezuela and Iran in a limbo, listing of ONGC Videsh shares on a stock exchange through an initial public offer (IPO) will not fetch the right valuation.
ONGC Videsh management has proposed to the government that any listing plans should be followed up after 2022 by when the company would have been able to optimally monetise its overseas assets.
The push to defer listing of shares follows the a rejection earlier this month from Petroleos De Venezuela SA (PDVSA) for additional 9% equity stake in the San Cristobel oil and gas asset, in which the Indian E&P already held a 40% stake.
ONGC Videsh was unwilling to make any fresh commitment in San Cristobel asset given the political turmoil and the Latin American country and PDVSA’s existing default in payment of old outstanding.
ONGC Videsh’s investment in San Cristobel is verging on turning into a non-performing asset as PVDSA has defaulted in payment of $450-million as dividend and the Indian company has not received any crude oil from the asset in lieu of the payment.
At the same time, the consortium of Indian companies led by ONGC has made no headway with its planned $3-billion investment to develop Farzad B offshore oilfields in Iran in view of sanctions imposed on Persian Gulf nation by the US Trump Administration.
The Indian E&P majors’ hopes of higher valuations from listing its shares at the stock exchanges after 2022 was pinned on completing development of Rovuma Area I gas fields in Mozambique which ONGC Videsh bagged earlier this year and starting to ship liquefied natural gas back to India.
The company is currently working on an exit from Satpayev oilfields in Kazakhstan, after it failed to establish viable recoverable crude oil from the asset and any listing at present would be impacted by the development, company sources said.