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g7nicholas - Tue, 26 Dec 06 :
ONGC, RIL jointly eye Iraq oil field
Reuters
Posted online: Tuesday, December 26, 2006 at 1649 hours IST
New Delhi, December 26: State-run Oil and Natural Gas Corp (ONGC) and its private competitor Reliance Industries Ltd (RIL) are in talks to jointly develop Tuba oil field in southern Iraq, top ONGC officials said on Tuesday.
ONGC, through its overseas investment arm ONGC Videsh Ltd, along with RIL and Algeria's Sonatrach tried in 2000 to secure the field in Iraq for production of crude oil.
A senior company official, who did not wish to be identified, said ONGC had initiated talks with RIL and Sonatrach to revive the consortium and pursue the opportunity jointly.
ONGC chairman and managing director R. S. Sharma confirmed the project was being discussed, and said: "Yes we are in talks with Reliance on Tuba field."
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A Reliance official declined to comment.
The ONGC official who declined to be named said discussions were still at a preliminary stage. He said ONGC and RIL were expected to hold a 30 per cent stake each in the project-specific consortium and Sonatrach would hold the remaining 40 per cent.
Iraq is expected to enact an oil law that would allow the regions to negotiate oilfield contracts with foreign investors.
Iraq desperately needs foreign investment to revive its shattered economy, which relies heavily on oil export revenues. The country straddles the world's third largest oil reserves.
Analysts say if the consortium works out, it will be the first time that two arch rivals, ONGC and Reliance, work together abroad rather than competing.
"It is a great story. Cutting throats will not help. Cooperation is good for the companies and the country," said Anushree Sinha, senior fellow at National Council of Applied Economic Research.
India imports 70 per cent of its crude oil demand.
Shares in ONGC ended 2.64 per cent up at Rs 888.10 in a firm Mumbai market, while Reliance shares closed 0.42 per cent firmer at Rs 1,276.75.
