Jindal Steel and Power Creates Oil and Gas Subsidiary

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Jindal Steel and Power Limited (BSE:532286) (Hisar, Haryana), part of the $10 billion O.P. Jindal Group, has made its foray into the oil and gas sector by floating a new wholly owned subsidiary, Jindal Petroleum Limited. The new company will spearhead Jindal Steel and Power's domestic and international operations in the petroleum business. The launch of the new subsidiary comes in the wake of the government's New Exploration Licensing Policy to ensure energy security by promoting private-sector investments in oil and gas exploration.

Jindal Petroleum started its exploration activities by participating in the recent New Exploration Licensing Policy-VII round in which the company won a 1,400-square-kilometer block in Jaisalmer, Rajasthan. The company has also acquired four blocks in Georgia and is in the process of obtaining a few blocks in Bolivia. Recently, Jindal Petroleum and Enigma Oil and Gas Exploration Limited (Namibia), a subsidiary of Chariot Oil & Gas (LSE:CHAR) (Guernsey, United Kingdom), jointly won exploration rights to three blocks in Peru. The onshore blocks are located in the Maranon and Huallaga Basins of northern Peru and have an aggregate gross area of 19,567 square kilometers. Jindal Petroleum owns 50% stakes in one of the blocks (159, Maranon), and 80% in the other two (147, Maranon and 153, Huallaga). The exploration phase of the blocks will consist of five rounds, spanning seven years. The company expects to start 2-D and 3-D surveys, as well as drilling work in the blocks within 18 months.

Jindal Steel and Power is India's third largest steel manufacturing company, and is also involved in power generation. The company has an active presence in Bolivia with development rights to the country's largest iron ore reserves in El Mutun. It is speculated that once the company acquires oil blocks in Bolivia, it may consider setting up a steel-manufacturing unit in South America. Though petroleum coke is a vital raw material in steel manufacturing, the launch of Jindal Petroleum is believed to be the first step in Jindal Steel and Power's strategy to diversify into the oil and gas industry. In the upstream sector, the company has announced that it will focus on acquiring exploration blocks as well as producing fields in the next few years.

Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.