Essar Oil to raise $5 bn loan from 4 banks

Oil refiner Essar Oil is close to raising $5 billion in loans underwritten by four banks to fund the expansion of its refinery in western India, three bankers with knowledge of the deal said on Thursday.

Essar will raise $3.5 billion in 12-year, rupee-denominated loans underwritten by top lender State Bank of India, ICICI Bank and IDBI Bank, the bankers said.

It will also raise $1.5 billion in foreign currency loan from Standard Chartered and ICICI Bank, they said. "A couple of us have already signed the underwriters agreement. The other two will do it soon," said one banker, who declined to be identified because he was not authorised to speak to the media.

Essar is spending $6 billion to expand its 210,000 barrels a day refinery in western Gujarat state to 1 million barrels a day within three years. The bankers said the company's founders would bring in about $2 billion in equity for the expansion and working capital.

Imperial Energy has choosen OVL over Sinopec

UK-listed Imperial Energy today said it has chosen ONGC Videsh Ltd over Chinese competitor Sinopec to discuss a possible sale to the Indian company and an announcement is likely shortly. OVL, through its wholly owned subsidiary Jarpeno Ltd, has made a 12.50 pounds per share takeover offer.

OVL, the overseas investment arm of state-run Oil and Natural Gas Corp (ONGC), had made a takeover offer last month and earlier this month China Petroleum and Chemical Corp (Sinopec) made a counter offer.Imperial, a relatively small British oil and gas company based in Leeds in UK, has oil producing blocks in Tomsk region of western Siberia in Russia and Kastanai in north-central Kazakhstan.It produced about 10,000 barrels of oil per day in December 2007 and is targeting to raise this amount to 80,000 barrels per day (4 million tons a year) by year-end 2011.

Read more in The Economic Times article.

ONGC Videsh in talks to buy Canadian oil co

ONGC Videsh (OVL) — the foreign investment arm of ONGC — is in talks to take over a mid-sized listed Canadian oil company having hydrocarbon blocks including oil sand assets. OVL is negotiating to pick up 100% equity stake in the firm for an undisclosed sum.

The acquisition would put OVL in a strategic position in the North American energy space. Code-named as “Project Crystal”, the target company is listed in TSX Venture Exchange in Canada and Stockholm Stock Exchange, Sweden. OVL, which is yet to begin due diligence, is tight-lipped about the company or the valuation.

The acquisition, if it goes through, will give OVL a foothold in oil sands, which gained currency following the spike in global oil prices. Canada is known to have high deposits of oil sands which are now being explored as a viable source of hydrocarbons. With oil prices ruling at over $125 a barrel, several non-conventional hydrocarbon sources like gas hydrates in India are being researched.

Read more in The Economic Times article.

RIL, Essar Oil eye ONGC`s `unviable` Kakinada refinery

After the UK-based Hinduja group, Oil and Natural Gas Corporation's (ONGC) proposed Rs 26,500-crore refinery at Kakinada, Andhra Pradesh, has found new suitors in Reliance Industries (RIL) and Essar Oil.This is despite ONGC maintaining its stand that the refinery is not financially feasible unless the Andhra Pradesh government gives it more incentives.

The 15-million-tonne-per-annum refinery will be implemented by Kakinada Refinery and Petrochemicals (KRPL). While ONGC's subsidiary Mangalore Refinery and Petrochemicals (MRPL) holds 26 per cent stake in KRPL, IL&FS holds 51 per cent and the remaining stake is held by the Andhra Pradesh government.

Read more in The Business Standard article.

Shell may offer $6.7 bn for 30% stake in RIL's D-6 block

Royal Dutch Shell is believed to be considering a bid to acquire up to 30% stake in Reliance Industries’ (RIL’s) discovered gas block in the Krishna-Godavari basin. Shell’s bid could be around $6.7 billion. This will value RIL’s D-6 block, with reserves of 14 trillion cubic feet (tcf) of gas, at over $22 billion, however RIL strongly denied the rumours.

Total of France, ENI of Italy and Brazil’s Petrobras have also shown interest in the D-6 block, which is set to commence commercial operations in a couple of months. BG and Exxon officials declined to comment on any interest in the KG basin block.

Read more in The Economic Times article.

RIL in talks with foreign firms to sell 10% stake in KG Basin D6 block

Mukesh Ambani-led Reliance Industries is mulling over brining a new strategic foreign partner for deepwater exploration in its KG Basin D-6 block and is understood to be talking to many players for divesting up to 10 per cent stake.RIL is considering this deal as part of a long-term strategic move as the company needs a partner for the level of deepwater drilling that is required at this particular block.

The potential partners could be among the global energy giants like ExxonMobil, Shell, BP, Total and Petrobras, as these are the companies with required expertise.The talks are on with most of the big global energy exploration and production players.

Global investment banking giant Goldman Sachs is one of the key consultants for the deal and RIL is sharing necessary data with the prospective partners to reach a valuation for the deal.

Read more in The Economic Times article.