ONGC and GAIL show interest in Exxon's share of Kazakhsta's oilfield

Stocks

oi-Shoaib MD

By Shoaib Md

Published: Thursday, June 9, 2011, 11:53 [IST]

Oil and Natural Gas Corp,commonly called ONGC, and the gas utility GAIL India have shown interest to buy part of the Exxon Mobil Corporation's stake in Kazakhstan's Kashagan oilfield.

B C Tripathi, GAIL Chairman, was quoted in a leading newspaper as, "We are definitely interested but it is too early to say anything. We are working on it."

Tripathi refused to divulge on how much of Exxon's stake in Kashagan were the two state-run companies intend to acquire.

Kazakhstan's KazMunaiGas, Royal Dutch Shell, Exxon Mobil, Total SA of France and ENI SpA each own 16.81 per cent in Kashagan field in Caspian Sea while ConocoPhillips and Japan's Inpex Corp hold 8.4 per cent and 7.56 per cent.

Sources say that the two PSU's are looking to take at least half of Exxon's stake in the Kashagan oil field.

The oil field is operated by Italy's Eni, and the expectation is that it will produce nearly 300,000 barrels of oil per day by 2014.

There are reports that the overseas arm of the PSU explorer, ONGC Videsh, and GAIL have made a non-biding offer showing interest in acquiring Exxon's stake. The bid to acquire will only be made on completion of due diligence.

Also the investment will need clearance first by the Empowered Committee of Secretaries and in the end by the Cabinet Committee on Economic Affairs.

Kashagan, considered to be one of the world's largest oil findings in last 40 years, will start commercial production from the first phase by the end of 2012. The field lies in the northern part of the Caspian Sea.

The world's fourth-largest oil importer is India. To secure its import the country is scouting for oil and gas assets. In this regard in April, ONGC Videsh (OVL) had acquired 25% of the Satpayev oil block in Kazakhstan.

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