State-owned ONGC Videsh Ltd has hit an agreement to acquire 8.4 per cent stake in the Kashagan field in Kazakhstan for around $5 billion, but it is still far away from its target of 20 million tonnes oil of oil equivalent by fiscal 2018.
In the FY12, ONGC Videsh produced 8.75 million tones of oil; and the acquisition of the stake in the Kashagan field, the world's biggest oilfield discovery in forty years, is expected to boost the company's output by nearly 16 per cent within a year.
Observers are of the view that ONGC Videsh needs to get more developed oil & gas-producing assets and not just exploratory acreages to achieve its 20 million tonnes oil equivalent target by 2018.
By fiscal 2030, the Indian oil giant aims to achieve a target of 60 million tonnes oil of oil equivalent.
Experts say that new acquisitions of oil fields will not help the company to meet its production target as an exploratory block will consume a minimum of five-seven years before yielding benefits.
ONGC Videsh's Imperial Energy acquisition of 2009 has not produced benefits in line with the company's expectations. The company had estimated the Imperial Energy to produce
80,000 barrels of oil per day by the fiscal year of 2012-13, but the company lowered the daily production just 45,000 barrels last year.
But, sources have said the company is aware of the fact that it requires more advanced oil & gas-producing assets, and thus its has started making attempts to get the best technology to exploit blocks that have tight reservoir.