REUTERS

NEW DELHI

STATE-RUN Oil India is looking to buy stakes in US gas driller Chesapeake Energy’s Mississippi Lime basin and ConocoPhillips’ oil sand assets in Canada, its head of finance said on Monday.

The cash-rich Indian explorer, whose assets in India’s north-east account for its entire crude oil production and the bulk of gas production, has been aggressively scouting to bolster its overseas assets portfolio.

Oil India has earmarked 60-70 billion rupees ($1.3 billion) for overseas acquisition, TK Ananth Kumar told reporters after announcing the company’s quarterly results.

He said the company had identified the US, Canada, Australia and parts of Africa for acquisitions and hoped to seal a deal in the current fiscal year that began on April 1
When asked if the opportunities included Chesapeake’s Mississippi stake, to which the company had earlier been linked, he replied “yes”.

Chesapeake has put several assets up for sale, as the second-largest US natural gas producer scrambles to raise cash to close a $9 billion to $10 billion funding shortfall. “Any decision (on buying a stake in Chesapeake’s Mississippi asset) will be taken after technical, commercial and political due diligence,” Oil India Chairman SK Srivastava said. Chesapeake came under intense pressure from investors to improve its corporate governance after Reuters reported in April that its chief executive Aubrey McClendon had taken out more than $1 billion in loans using his personal stakes in thousands of company wells as collateral.

India, the world’s fourthlargest oil importer, imports about 80 percent of its crude needs, and has been scouting for oil and gas assets abroad to meet rising local demand and to feed its expanding refining capacity.

India’s Reliance Industries and state-run GAIL have so far acquired significant shale gas assets in the US. The government allowed Oil India to go global in late-2005 and since then it has acquired stakes in assets in Venezuela, Libya, Gabon, Iran, Egypt, Yemen, Nigeria and Sudan.

“For unconventional assets, we can spend $100 million-$200 million. We don’t want to be operators as we don’t have experience in that. We will go as joint venture partners for unconventional hydrocarbon assets,” Kumar told reporters.

“For conventional, like Maurel et Prom’s assets, we can spend up to $1.5 billion,” he said. The company is still in the race to buy a stake in the Gabon assets of France’s Maurel et Prom, Kumar said. Oil India had earlier said it could partner with the African country for the assets, for which it had already done technical due diligence.

Earlier on Monday, Oil India posted a 21 percent decline in March quarter net profit to 4.45 billion rupees.

Separately, Kumar said the Indian government might sell some of its 78.4 percent stake in the company in the current fiscal year, part of the government’s plans to raise a total of 300 billion rupees ($5.4 billion) through stake sales to plug its fiscal deficit.