HPCL Unit Said to Plan Spending $300 Million on Overseas AssetsBy
Unit of Indian refiner in talks for Russian, Nigerian assets
Prize Petroleum subsidiary looking at active oil, gas fields
Hindustan Petroleum Corp., India’s third-largest state-owned refiner, plans to spend as much as $300 million for a stake in an active oil and gas field through a unit, a company official said.
The unit, Prize Petroleum Co., which focuses on the upstream oil business, is considering a minority stake in Russian or Nigerian assets, said the official, who asked not to be identified because the information is confidential. A 50 percent slump in crude the past year has eroded the value of production assets, making them attractive acquisition targets, according to the official.
Oil has fluctuated since slumping near $42 a barrel last month as concern that China’s economy is slowing fueled volatility in markets. Prices are down more than 25 percent from this year’s closing peak in May amid a global oversupply Goldman Sachs Group Inc. predicts may keep prices low for the next 15 years.
India’s state-owned energy companies have increased efforts to buy assets as Prime Minister Narendra Modi aims to cut dependence on imported energy to 50 percent by 2030 from about 77 percent now. Oil & Natural Gas Corp., the nation’s biggest explorer, on Sept. 4 agreed to buy a 15 percent share from OAO Rosneft in one of Russia’s largest oil-producing projects.
The acquisition would be Prize Petroleum’s largest investment since its inception in 1998, the official said. The unit owns 11.25 percent and 9.75 percent participating interests in two exploration and production blocks in Australia.
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