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India eyes oil sands investments

Reuters

Thursday, July 03, 2008

MADRID — Indian companies could invest $2-billion (U.S.) to $2.5-billion for stakes in Canadian oil sands projects, a top official said Thursday, part of efforts to secure overseas energy assets to fuel the country's fast-growing economy.

Oil Secretary M.S. Srinivasan said at the World Petroleum Congress in Madrid the companies were looking to pick up holdings rather than buy foreign firms.

Earlier this year, the head of state-run explorer Oil and Natural Gas Corp., R.S. Sharma, said his firm was interested in oil sands opportunities in Canada and was willing to make a large investment.

Mr. Srinivasan said Indian firms had explored buying stakes in Alberta oil sands projects two years ago to help make up for stagnating domestic output.

Since then, companies from other countries, including China, South Korea and Norway, have snapped up northern Alberta unconventional crude assets, leading some analysts to wonder how much prime acreage remains up for grabs.

Canada's oil sands, the largest deposits of crude oil outside the Middle East, are the target of more than $100-billion of investment as the world's oil industry has found that returns amid surging oil prices outweigh the high cost of development.

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