HPCL unit said to plan spending $300 million on overseas assets

Mumbai: Hindustan Petroleum Corp, India’s third-largest state-owned refiner, plans to spend as much as $300 million for a stake in an active oil and gas field through a unit, a company official said.

The unit, Prize Petroleum Co., which focuses on the upstream oil business, is considering a minority stake in Russian or Nigerian assets, said the official, who asked not to be identified because the information is confidential. A 50% slump in crude the past year has eroded the value of production assets, making them attractive acquisition targets, according to the official.

Oil has fluctuated since slumping near $42 a barrel last month as concern that China’s economy is slowing fueled volatility in markets. Prices are down more than 25% from this year’s closing peak in May amid a global oversupply Goldman Sachs Group Inc. predicts may keep prices low for the next 15 years.

India’s state-owned energy companies have increased efforts to buy assets as Prime Minister Narendra Modi aims to cut dependence on imported energy to 50% by 2030 from about 77% now. Oil & Natural Gas Corp., the nation’s biggest explorer, on 4 September agreed to buy a 15% share from OAO Rosneft in one of Russia’s largest oil-producing projects.

The acquisition would be Prize Petroleum’s largest investment since its inception in 1998, the official said. The unit owns 11.25% and 9.75% participating interests in two exploration and production blocks in Australia.

Hindustan Petroleum Corporation Ltd.(HPCL)