Govt clears OVL bid for Azeri stake, Scooters India revival

Tags: Companies
A cabinet panel on Thursday gave green signal for $ one billion acquisition of stake in an Azerbaijan oil field by the state-run ONGC Videsh (OVL).

OVL will acquire US energy major Hess Corp’s 2.72 per cent stake in the Azeri, Chirag and the deepwater portion of Guneshli fields in the Azerbaijan sector of the Caspian Sea and 2.36 per cent interest in the Baku-Tbilisi-Ceyhan (BTC) pipeline.

The CCEA authorised “OVL to incur expenses so as to keep the total exposure up to the approved amount of $ 1.001 billion at all times,” an official statement said.

OVL would get about one million tonnes per annum of oil for about a decade.

“In addition to oil revenue, the investment would enable OVL to enter into Azerbaijan, which is rapidly emerging into a strategically important country in the CIS region,” the statement said.

The ACG field has total reserves of over 6.5 billion barrels the 1,768-km BTC pipeline is one of the main export routes for Caspian crude oil production to the Ceyhan terminal in the Mediterranean sea in south east Turkey, with a capacity of around 1.0 million bpd.

OVL is present in 15 nations including Brazil, Colombia, Cuba, Iran, Iraq, Kazakhstan, Libya, Myanmar, Nigeria, Russia, South Sudan, Sudan, Syria, Venezuela and Vietnam.

The cabinet also approved the Rs 200 crore revival package for ailing public sector unit (PSU) Scooters India (SIL).

This follows shelving of the government earlien plan to sell out its entire 95.38 per cent stake in SIL. The heavy industry had proposed a revival package of more than Rs 200 crore after board for reconstruction of public sector enterprises suggested in this regard, the government statement said.

The automobile company, which has about 1,200 regular employees, has been incurring losses since 2002-03. In March 2009, the company was declared sick. Set up in 1972, the company now produces only three wheelers.

In yet another decision on Thursday the cabinet approved amendments to the Regional Rural Banks (RRBs) Act. The amendments seek to enhance their capital base and to fix the maximum term of two years for government appointed non-official directors, a government statement said.

(With inputs from Amit Mudgill, New Delhi).

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