NEW DELHI: Indian oil and gas producer Oil India Ltd is looking at buying a stake in Chesapeake Energy Corp.’s Mississippi Lime formation in Oklahoma, a source with knowledge of the matter said on Tuesday.
“Oil India is examining this and will shortly send a team to the US,” the source said, adding it is too early to comment on the size of the stake that Oil India could buy.
Oil India wants to invest between $1 billion and $1.2 billion for acquiring overseas oil and gas producing assets, its finance director said in October.
Chesapeake last month said it expects to strike a joint venture in this quarter for its unconventional liquid-rich Mississippi Lime play covering 2 million acres.
The source said Oil India may partner other state-run firms like Oil and Natural Gas Corp in buying a stake in the Mississippi Lime play.
Oil India and Chesapeake could not be reached for comment. Oil India, whose assets in India’s northeast account for its entire crude oil production and the bulk of gas production, has been aggressively scouting for overseas assets in discovered and producing areas. The US No. 2 gas producer needs money to close a funding gap.
The government allowed state-run Oil India to go global in December 2005 and since then it has acquired stakes in assets in countries including Venezuela, Libya, Gabon, Iran, Egypt, Yemen, Nigeria and Sudan.
India, the world’s fourth-largest oil importer, imports about 80 percent of its crude needs. It is scouting for oil and gas assets abroad to meet rising local demand and to feed its expanding refining capacity.
In the United States, Indian gas utility GAIL India has agreed to buy a 20 percent stake in one of Carrizo Oil & Gas Inc’s shale gas assets while top private firm Reliance Industries has sealed three shale gas joint ventures.