ONGC rubbishes US criticism

Oil and Natural Gas Corporation has rubbished US criticism of it teaming up with a Chinese firm to acquire a Syrian oilfield, saying the $573 million spent on taking a stake in al-Furat fields was not a FDI to the UN-sanctioned country but was a payout to a Canadian firm for the equity.

"I have seen media reports of US taking strong exception to investment (in Syria). We are (only) paying PetroCanada for the acquisition and not making any FDI. The Canadian firm had already invested in Syria and we are taking over their stake," Subir Raha, chairman and managing director, ONGC said.

Reports last week had said that the US had set an aide memoire, saying the it strongly opposed such investments in Syrian resources as the latter's regime may exploit news of any FDI as evidence that it was not isolated and therefore not comply with UNSC resolution, seeking its complete cooperation in investigation into the assassination of former Lebanese Prime Minister Rafiq Hariri.

"We shall comply with UN sanctions completely and totally," he said emphasising ONGC had not defined any international sanctions anywhere in the world.

A petroleum ministry official questioned US saying, "What were they doing when PetroCanada made that investment. They have been telling us not to do business with Damascus but have they stopped US companies from investing in Syria."

"Today they are telling us not to do business with Iran and Syria, tomorrow they may say the same for Sudan or Myanmar or some other country. At stake is not just our energy security but also our right to take decisions ourselves," he said.

Last month ONGC and China National Petroleum Corp won the bid to acquire about 37 per cent stake in Syrian oilfields of Canadian oil company Petro Canada for Euro 484 million.

This was the first time that Indian and Chinese companies had made a joint bid for acquiring oil properties overseas.

The two government-run firms, often competing against each other in the race for acquiring overseas assets, are sharing equity in 50:50 ratio. ONGC's overseas arm OVL had competed with the Chinese firms for oil properties in Central Asia, West Africa and Latin America.

They were pitched head-on for buying Canadian firm PetroKazakhstan, which has most of its operations in Kazakhstan, and EnCana's Ecuador assets.

Shell is the operator of the assets operated by Al Furat Petroleum Company, a company owned by the Syrian Petroleum Company, Syria Shell Petroleum Development B.V. (Shell) and Petro-Canada.

ONGC-CNPC bought Petro-Canada's 37.5 per cent interest in the Deir Ez Zor block, 33.3 per cent interest in Ash Sham block, 36.0 per cent interest in Gas Utilization Agreement.

This essentially would give the two firms access to about 58,000 barrels of oil equivalent per day from Syria.