Essar Global Ltd., which has interests in energy, steel and telecommunications, plans to spend a record $2 billion on developing oil and gas fields in India, Myanmar and Nigeria to benefit from high fuel prices.

The Mumbai-based group will use about $200 million of its own cash and borrow the rest for the three-year spending plan, Shishir Agrawal, chief executive officer of Essar Exploration & Production Ltd., said in an interview in the city yesterday. Output from fields in India may be leveraged to raise funds.

An almost threefold increase in crude oil prices in five years makes it attractive for companies including Reliance Industries Ltd. and Malaysia's Petroliam Nasional Bhd. to buy and develop energy assets overseas. Essar is looking to bid in Africa, Central Asia, Southeast Asia and India, Agrawal said.

"We want to grow in the exploration and production business," Prashant Ruia, Essar group's director, said in a separate interview in Mumbai yesterday. "We want to grow by taking acreages in India and overseas. We may have partners in developing some areas."

Crude oil futures in New York have gained 34 percent in a year and reached a record $83.90 a barrel on Sept. 20, the highest since the contract was introduced in 1983. Crude for November delivery was at $79.84 at 10:02 a.m. in London.

'Have a Hedge'

Developing two fields that Essar acquired in Myanmar in 2005 may cost as much as $1 billion. Another $500 million is needed for the Ratna fields, off India's west coast, Agrawal said. At least $60 million may be spent on surveying an area in Nigeria, he said.

The overseas fields will help secure crude oil supplies for Essar Oil Ltd.'s refinery in India's Gujarat state and natural gas to generate power for Essar Group's steel plants in India and Canada.

"The group will have a hedge." Agrawal said. "Even if we don't import it for our own consumption, we can swap" cargoes with other producers, he said. "Our energy requirement is very high and growing."

Essar Oil shares rose as much as 2.55 rupees, or 4.2 percent, to 62.8 rupees apiece and traded at 61.2 rupees at 3:41 p.m. local time on the Bombay Stock Exchange.

Essar Oil, India's newest refiner, started its plant in Vadinar last November and expects production to reach the full capacity of 10.5 million metric tons, or 210,000 barrels a day, this quarter, Ruia said.

Expansion Plans

The refiner on Aug. 31 sought shareholder approval to raise $750 million by selling securities overseas to expand the plant's capacity to 16 million tons a year. Ruia said the details of the expansion and funding are still to be worked out.

Essar Global, which owns India's third-biggest steelmaker, plans to spend about $6 billion to boost production more than fivefold by 2012.

Output will rise to as much as 25 million tons a year, said Ruia. Essar Global will increase annual output at its Canadian unit, Algoma Steel Inc., to 4 million tons and is also building a 2.5 million-ton-a-year plant in Trinidad and Tobago, he said.

"It makes sense for the company, whose oil requirement is growing, to have their own supplies," said K.K. Mital, who helps manage 1.5 billion rupees ($37 million) at Escorts Asset Management in New Delhi. "It's a backward integration."