India's ONGC may issue dollar bonds for $5.5 billion Kazak buy
BY ASA FITCH
DUBAI -- ONGC will likely issue United States dollar bonds to raise funds for its planned purchase of an 8.4% stake in a Kazakstan oil field from ConocoPhillips for about $5.5 billion, the company's CMD said.
ONGC is keen to tap a buoyant market for issuers after its overseas investment subsidiary sold its first ever $800 million bond earlier this week.
The company is seeking approval for a deal with ConocoPhillips to buy a 8.4% stake in Kazakstan's Kashagan field and would need financing for the transaction, Sudhir Vasudeva, ONGC's CMD, told Dow Jones Newswires on the sidelines of a conference in Dubai.
"That deal is worth about $5.5 billion" he said. "We are only waiting for the government of Kazakstan's approval. Once that is done, which is expected by July, we will have to go to the bond market again for this. This time we have raised about $800 million. That time we will need more."
Mr. Vasudeva said it would be another United States dollar bond issue, but whether the bond would fund the entire purchase price wasn't clear. Nor was it certain the deal would go through. A note last month from analysts at Eurasia Group said the government was likely to veto the sale to ONGC in favor of a Chinese buyer.
Mr. Vasudeva said ONGC plans to increase international production eightfold by 2030, which would necessarily involve acquisitions. He said the company is now investing about $6 billion a year.
"Today we are getting about 85% of energy from domestic sources and 15% from our activities abroad" he said. "As we move forward, what we foresee in 2030 is 55% will be coming from domestic resources and 45% from outside. That can only come through large acquisitions" he said. "There is no continent, there is no hydrocarbon space we have left. Everything interests us."
ONGC aims to double production and treble revenue by 2030. India's crude output was 761,370 bopd in March.
Dow Jones Newswires