ONGC's $5-bn plan for ConocoPhillips' Canadian assets hits roadblock

Oil and Natural Gas Corp's (ONGC) plans to bid for part of ConocoPhillips' Canadian oil sand assets worth around $5 billion has hit a roadblock because of the public sector oil giant's investments in  Sudan and Iran, against both of whcich the US has imposed trade sanctions.

The state-run oil and gas explorer's chairman, Sudhir Vasudeva, today told The Times of India, "We find it difficult to close energy deals in the US because of our investments in countries that have sanctions imposed by the US."

The Mumbai-based oil major's overseas arm OVL already has stakes in 33 projects in 14 countries, including countries on the US sanction list like Myanmar, Syria, Sudan, Cuba and Iran.

OVL has invested around $87 million in Iran, $1.5 billion in Myanmar, $270 million in Syria and $650 million in Sudan.

"We have taken a legal opinion that warns of forfeitures of our proposed investments to acquire energy assets in the US because of our interests in countries with human rights violations," another senior ONGC official told the paper, adding that this will put billions of dollars at risk.

As part of its long overdue expansion strategy, ONGC, which produced 8.75 million tons of oil and oil equivalent of gas in the last financial year, has signed joint ventures with ConocoPhillips, China National Petroleum Corp and Japan's Mitsui Group.