The acquisition, worth $5 billion, represents the state-controlled producer’s largest overseas purchase and comes at a time when ONGC is looking to increase production to fuel India’s growing economy.
At present, India imports almost 80 percent of the oil it requires. This is due to the fact that its refining capacity has outgrown the oil output locally.
Located under the Caspian Sea, Kashagan is the biggest oil field to have been discovered since 1968 and holds approximately 30 billion barrels of oil, of which analysts estimate up to 12 billion can be extracted.
ONGC Videsh, the overseas arm of ONGC, said the deal would likely add about 20,000 barrels per day to its annual production for 25 years.
