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ONGC Videsh to buy ConocoPhillips' 8.4% stake for $5 bn

The acquisition, subject to relevant approvals, priority rights and consortium pre-emption rights, is expected to close in the first half of 2013, company said.

, ET Bureau|
Updated: Nov 26, 2012, 08.02 PM IST
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The acquisition, subject to relevant approvals, priority rights and consortium pre-emption rights, is expected to close in the first half of 2013, company said.
The acquisition, subject to relevant approvals, priority rights and consortium pre-emption rights, is expected to close in the first half of 2013, company said.
NEW DELHI: State-run Oil & Natural Gas Corp's foreign arm ONGC Videsh has finalized definitive agreements for the acquisition of the 8.40% participating interest of ConocoPhillips in the North Caspian Sea Production Sharing Agreement (NCS PSA) that includes the Kashagan Field, in Kazakhstan.

The acquisition, subject to relevant government, regulatory approvals, priority rights and consortium pre-emption rights, is expected to close in the first half of 2013, company said in a statement.

The acquisition would mark ONGC Videsh's entry into the largest oil proven North Caspian Sea of Kazakhstan.

The Kashagan Field, located in the shallow waters (~5m to 8m) of the Kazakh North Caspian Sea, is the world's largest current development project. Kashagan's consortium partners are Eni, Total, Shell, ExxonMobil and KazMunaiGaz each with 16.81% PI, while ConocoPhillips has 8.40% PI and Inpex has 7.56%.

From Phase 1, the acquisition is likely to add an average annual production of about 1.0MMT for a period of over 25 years with a peak of about 1.6 MMT.

When Phase 2 and 3 are implemented, the OVL's share will be significantly higher.

The acquisition also bears a significant strategic importance to India in terms of contributing towards India's energy security, it said.

ONGC has recently formulated its perspective plan-2030 envisaging that the oil and gas production of ONGC Videsh would increase from the current level of 8.75 MMTOE in FY'12 to 20 MMTOE by FY'18 and 60 MMTOE by FY'30.

Sudhir Vasudeva, CMD, ONGC said the current transaction was a major step towards achieving this goal. Goldman Sachs is acting as exclusive financial advisor, Allen & Overy as legal advisor, E&Y as tax and accounting advisor and bayphase as technical advisor to ONGC Videsh.

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