Oil India Eyes Shale Gas Acquisition Overseas
Oil India plans to buy shale gas assets in the U.S. and Australia, and has shortlisted seven investment banks to explore acquisition opportunities, senior officials said on Thursday.
The state-run explorer plans to spend 45 billion rupees ($962 million) in capital expenditure in this fiscal year to March 2011, including acquisitions, T.K. Ananth Kumar, director of finance at Oil India told reporters.
Kumar said the company would team up with two other state-run energy firms, Gail India and Indian Oil, for possible acquisition of shale gas assets. The firm wants to make at least one acquisition in the current fiscal year, he said.
Oil India has shortlisted seven investment banks including Citigroup, Morgan Stanley, Bank of America Merrill Lynch and Deutsche Bank for its overseas shale gas acquisition plans.
Companies from around the globe are increasingly investing in U.S. shale plays - underground rock formations that hold reserves of oil and natural gas. Shale gas accounts for between 15% and 20% of U.S. gas production but is expected to quadruple in coming years, touching off a scramble among producers large and small for access to resources.
Indian energy major Reliance Industries, which has already done three shale gas joint ventures with U.S. companies this year, is a likely partner for Chesapeake Energy Corp's Eagle Ford shale acreage, a U.S. brokerage firm said on Wednesday.
Separately, Oil India Chairman N.M. Borah declined to comment on whether state-run Oil and Natural Gas Corp, Gail and Oil India would jointly counter-bid Vedanta Resources' $9.6 billion offer to buy a majority stake in Cairn India.
A senior official in the Indian oil ministry told press representatives on Wednesday that the state-run firms would not counter Vedanta's offer for a stake in Cairn India.
