ONGC, Sinopec now spar over Canadian co
ONGC Videsh (OVL) and China’s Sinopec are once again pitted against each other for global oil assets. This time around, it is to acquire Canadian oil firm Tanganyika Oil.
According to market sources, Tanganyika Oil has approached OVL for renegotiation ��� after the failure of two-earlier rounds of talks ��� and this was followed by Sinopec���s counter-offer. Tanganyika Oil, which reportedly has a market value of $1.4 billion, has oil and gas assets in Syria.
According to sources, OVL���s offer was around 120-145 Swedish Krona (SEK). Sinopec has made a counteroffer of around 160 SEK. Later, it reportedly revised the bid to 175 SEK. It is unlikely that OVL would match the Chinese company���s revised offer even as Sinopec���s entry is expected to strengthen Tanganyika���s position at the negotiating table.
OVL is, however, confident due to its recent success in edging out the Chinese firm in the race for the UK-based Imperial Energy. Besides, this time, the Canadian firm has approached OVL for a deal, oil sector experts said.
OVL is interested in picking up a 100% equity stake in the firm, said sources. OVL is, however, tight-lipped about the developments related to the deal. The OVL board has already approved submitting a non-binding bid for acquiring 100% shares of the company.
Sources said OVL���s earlier attempts to acquire Tanganyika failed since the Indian firm���s offer was found to be insufficient. ���It has, however, invited OVL for further discussion with a revised offer,��� sources close to the development said. In a statement, Tanganyika confirmed that the company was in exclusive discussions with a third party relating to the acquisition of all of the issued and outstanding shares of the company. ���No assurance can be given that these discussions will lead to a binding agreement,��� it said.
Tanganyika holds operating interests in two production sharing agreements covering the Oudeh block and the Tishrine/Sheikh Mansour block in Syria. The company���s net production is pegged at 6,025 barrels of oil per day (BOPD). During the first half of 2008, the average gross-field production was around 16,670 BOPD. The company, which was earlier listed on Canada���s TSX Venture Exchange, recently started trading on the Toronto Stock Exchange.
OVL has been aggressively pursuing energy interests in South America and North America. It has significant portfolio of oil & gas assets in Colombia, Brazil, Venezuela and Cuba. It has hydrocarbon assets in Vietnam, Russia, Sudan, Myanmar, Iraq, Libya, Qatar, Egypt, Syria and Turkmenistan.