UPI Energy Watch

India's OVL plans purchase of U.K.'s Imperial Energy

After being put on hold while finances were sorted, ONGC Videsh, the overseas investment arm of India's Oil and Natural Gas Corp., has said it will buy U.K.-based Imperial Energy PLC through a combination of loans from domestic banks and ONGC, a spokesman said.

"OVL is no longer looking at overseas debts for the acquisition due to the global credit crunch. Further, many domestic banks are willing to lend money to OVL," an ONGC spokesman said.

Previously OVL was considering borrowing about $1 billion from a Dutch bank, India's Business Standard reported.

About $1 billion of the loans will come from Indian banks. ONGC will be the guarantor of those domestic bank loans and in addition also will lend OVL another $1.1 billion to complete the $2.1 billion acquisition of Imperial Energy.

OVL is particularly interested in Imperial's oil and gas assets in Russia's Siberia and in north Kazakhstan.

New Zealand opens new oil fields to bidding

New Zealand's government has opened bidding for new oil field exploration in the East Coast Raukumara field and the Northland basin.

Several major international oil exploration firms already have expressed interest in making a bid, said New Zealand's Energy Minister Gerry Brownlee.

Testing earlier this year suggested that the Raukumara basin could hold promising reserves, and exploration geophysicist Chris Uruski said New Zealand's total oil reserves potentially could be around 10 times as large as the reserves in the Taranaki basin, the National Business Review reported.

In addition, the basin is very thick, and it is thought there also could be oil and natural gas trapped within the walls of the basin.

The government is hopeful these new oil and gas exploration blocks will increase the country's oil and gas exports, which were about $800 million in October.

Bids are now open and will close in January 2010.

IEA predicts 2009 fall in oil demand

Global demand for oil likely will continue to fall in 2009 if the economies of developing countries continue regress, said Nobuo Tanaka, the head of the Paris-based International Energy Agency.

Tanaka was specifically referring to China, India and the Middle East when he suggested those economies could see only slight growth in demand next year, OilVoice U.K. reported.

The IEA also lowered its Medium-Term Oil Market report for 2009 to 2013 to 220,000 barrels per day above 2008 levels at an average of 86.37 million barrels per day. This equates to an average anticipated growth of 1.2 percent every year until 2013.

While Tanaka speculated demand is likely to continue on a downward trend, he did predict global oil prices would rebound after the Organization of Petroleum Exporting Countries cuts its production. He predicted oil prices will be around $120 a barrel by 2030

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Closing oil prices, Dec. 10, 3 p.m., London

Brent Crude oil: $42.76

West Texas Intermediate crude oil: $44.31

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(e-mail: energy@upi.com)