Ongc: IOC, ONGC arm call off Kenya field stake talks | India News

NEW DELHI: IndianOil (IOC) and partner ONGC Videsh have called off talks for buying a stake in Tullow Oil’s Lokichar oil field in Kenya, a deal that was estimated last year to be worth about $2 billion.
People in the know said the decision to end discussions lasting several months was taken after senior executives from the two Indian suitors visited Kenya in July last year. They, however, did not disclose the reason for pulling out.
Tullow has an Indian connection in company chief executive Rahul Dhir, who headed Cairn India at the time the Indian arm of the then independent Scottish explorer made one of India’s largest on-land oil and gas discoveries in Rajasthan’s Barmer district. Cairn was acquired by Vedanta in 2011 and merged with the parent in 2017.
IndianOil had in March 2022 shown some interest in acquiring a stake in the project. But those initial contacts with Tullow withered – perhaps because of the project and investment size. Subsequently, IndianOil roped in ONGC Videsh, which brings on the table expertise in operating oil fields.
Tullow holds 50% stake in the south Lokichar field and is willing to give up operatorship in favour of a strategic partner. Total of France and Africa Oil Corporation hold 25% each.
The fields are located in blocks 10BB and 13T, while oil production is projected at 120,000 barrels per day (bpd). Total oil recovery is pegged at 585 million barrels over the field’s life.
The Lokichar oil is waxy just like Barmer crude, which, like the Indian project, will have a 825-km heated pipeline to transport the crude to Lamu for shipping. Dhir was appointed Tullow CEO in July 2020 close on the heels of his Delonex, an Africa-focused company he had floated after quitting Cairn India, secured $600 million funding from Warburg Pincus.

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