Vankor field acquisition: A positive for ONGC
Declining crude oil prices have been one of the reasons for upstream oil firms such as ONGC (Oil and Natural Gas Corporation) under-performing on the bourses. Though lower crude prices mean lower realisations, thus lower earnings for oil producers like ONGC, they have also provided opportunities. The oil assets in the international market are available at decent valuations. ONGC’s stake acquisition in Vankor Field is a step in the same direction. ONGC, through ONGC Videsh Ltd (OVL), is acquiring 15 per cent stake in Russia’s Vankor oilfield for $1.26 billion. Located in Eastern Siberia, Vankor is Russia’s second-largest oil and gas field. Also, it is an oil-producing asset with proven reserves which reduces the risks significantly.