Indian Oil buys 17% stake in Oman Field Oil

India’s Ambassador to Oman, Indra Mani Pandey said that cooperation between Oman and India in oil and gas sector is growing.

Reacting to news of the acquisition, the India’s ambassador said: “This step will further enhance cooperation between the two countries in oil and gas sector. This key development has come in wake of the successful visit of Prime Minister of India, Narendra Modi, to Oman during February 11-12, 2018 and is a reflection of India’s commitment to take its strategic partnership with Oman to a new level.”

India’s state-owned oil and gas company Indian Oil Corporation Limited (IndianOil) has acquired a 17 per cent stake in Oman’s Mukhaizna oil field at a valuation of $329 million, according to a statement from Shell Overseas Holdings Limited.

The statement issued by Shell read that it “announced the completion of the sale of Shell Exploration and Production Oman Limited (SEPOL), which holds a 17 per cent participating interest in the Mukhaizna Production Sharing Agreement in Oman, to IOCL Singapore PTE Ltd. (“ISPL”), a subsidiary of Indian Oil

Corporation Limited (IndianOil)”. The effective date of the transaction is January 1, 2017, the statement added.

With this transaction, Indian Oil’s stake in Mukhaizna will be 17 per cent, with the remaining 83 per cent owned by Occidental Mukhaizna LLC (45 per cent), Oman Oil Company S.A.O.C (20 per cent), Liwa Energy Limited (15 per cent), Total E&P Oman (2 per cent) and Partex (Oman) Corporation (1 percent), and Occidental Mukhaizna LLC being the operator of the field. 

Shell Oman Country Chair, Chris Breeze said in a statement, “We are pleased to assist the entry of IndianOil, an integrated energy company with activities in oil, gas, petrochemicals and one of India’s largest companies, into the upstream sector in Oman. Shell remains fully committed to Oman’s energy future and is actively seeking to make further investments in the country.”

The news was confirmed by India’s Minister of Petroleum and Natural Gas Dharmendra Pradhan on Twitter.

He added that the development was the result of Prime Minister Narendra Modi’s visit to Oman.

“In a major boost to India’s energy security, @IndianOilcl has acquired 17% stake in the Mukhaizna oil field, Oman from Shell. This development is a follow up to Hon. PM Shri @narendramodi’s visit to Oman and will enhance bilateral energy cooperation between India & Oman,” Pradhan tweeted.

The minister added that the field would provide a sizeable amount of crude oil to India. “The equity oil asset will feed Indian refineries with an additional 1 million metric tons (MMT) of crude oil,” he added. Moreover, this is the second time in the recent past that India has acquired a stake in an oil field in the region. “Second major acquisition of an oil asset in the gulf after Indian consortium acquired 10 per cent stake in UAE’s lower Zakum field,” Pradhan said.

The minister was referring to the Indian state-owned companies Oil and Natural Gas Corporation (ONGC), Indian Oil Corporation (OIC) and Bharat Petroleum Corporation Limited (BPCL) buying a stake in the UAE off shore field for USD600 million in February.