Oil India gears up for overseas shale assets acquisition

State owned oil major, Oil India Ltd (OIL), is in talks with several US shale gas companies to jointly acquire shale gas properties in the US and Australia worth Rs1 billion in 2010.

N M Borah, chairman of OIL told PTI that the company is currently talking with some US-based shale gas companies to form a JV to acquire shale gas assets globally since US shale gas companies have the expertise and the technology for the extraction of shale gas.

Oil India, which has earmarked a budget of Rs1 billion for potential shale asset acquisitions in 2010, is reported to have hired seven investment banks including Citigroup, Morgan Stanley, Bank of America Merrill Lynch and Deutsche Bank to identify and advise on potential shale gas assets that could be acquired in the US and Australia.

The public sector exploration company may even team up with two other state run energy firms, GAIL India and oil marketing company Indian Oil for joint acquisitions of shale gas properties overseas, according to T K Ananth Kumar, Oil India director of finance.

Oil India also plans to invest around Rs300-Rs500 crore in shale gas exploration over the next three to four years, said Borah.

Meanwhile, Washington has offered India its expertise in exploring and exploiting shale gas resources - a move that is aimed at helping India reduce its dependence on oil and gas imports. (See: US offers India technology to exploit shale gas)