Indian Energy Giant Sells its Sahkalin Share

Oil and Natural Gas Corporation has ruled out selling its share of crude oil from the rich Sakhalin oilfields in the open market, reports Business Standard.

The company has instead decided to refine the entire crude at its subsidiary in Mangalore.

ONGC, through its wholly owned subsidiary, ONGC (Q, N,C,F)* Videsh (OVL), holds a 20% stake in Sakhalin-I, which translates to a share of 50,000 barrels per day.

This decision, however, could change if the price of crude oil in the international market falls further from the current 18-month lows as the transportation and logistic costs will come into play and it might look to sell crude in the global market.

The first batch of Sakhalin crude will reach MRPL on November 30, 2006, while the second batch is expected by end-December, officials said. The first two cargoes will be almost 700,000 barrels each.

Sakhalin-I is one of the six OVL projects which are already under production, out of the 26 projects that it partly owns across 15 countries. The producing assets yielded 6.34 million tonnes of oil equivalent (mtoe) in the last financial year, which are expected to go up to 7.5 mtoe in the current year.