'Some Talks Going On', Says Oil India CMD On Kenya Oilfield Acquisition

Oil India Limited (OIL) Chairman and Managing Director Ranjit Rath on Thursday said the public sector oil marketing company is holding talks with other stakeholders on the potential acquisition of a 50 per cent stake in Tullow Oil's $3.4-billion oilfield project in Kenya.

“I can only say some discussions are going on,” Rath told reporters at a post-results press conference, without giving further details. His comments come days after reports said the country’s flagship overseas oil firm ONGC Videsh has got a new partner in Oil India Ltd for the acquisition.

He hinted that the company had signed non-disclosure agreements on the issue. The company is engaged in the due-diligence process looking into the technical, commercial, regulatory aspects, he hinted.

Russian dividends

Stressing that dividends collected from Russian assets are impressive, Rath said they have hit a transactional constraint.

After the Russian invasion of Ukraine and the subsequent sanctions on Moscow’s banking network repatriating earnings from Russia have become a major challenge for foreign companies. “Since we have a subsidiary office in Singapore, and investments in overseas assets are made through our joint venture or subsidiary structures we are working out solutions with our other partners,” he said.

This includes engaging with legal consultants to evaluate various alternatives, and monitoring the situation on a daily basis, he said.

The funds are parked in Indian banks based in Russia. As a result, they are earning interest, he said.

Oil India on Wednesday reported a nearly 9.7 per cent year-on-year jump in standalone net profit to Rs 1,788.28 crore for the fourth quarter of FY23 as compared to Rs 1,630 crore a year-ago period.

The state-owned oil company also witnessed double-digit growth in revenue driven by the natural gas business. Sequentially, the company’s quarterly net profit rose 2.4 per cent. In the previous quarter, profit after tax had stood at Rs 1,746.10 crore.