ONGC eyes Exxon’s stake in Angola block

ONGC eyes Exxon’s stake in Angola block

New Delhi: State-run explorer Oil and Natural Gas Corp is examining a proposal to buy US energy major Exxon Mobil’s holding in an oil block in Angola, a top official said on Monday.

“The proposal has come to us. We keep getting such proposals and we are examining," said R S Butola, managing director of ONGC Videsh, the overseas investment arm of ONGC. “Definitely, we are interested."

Butola said the talks were at initial stages and declined to comment on the valuation of the deal.

Analysts said the Angolan field stake buy would be a welcome acquisition for India, which has been lagging China in the hunt for natural resources as both countries seek to feed their fast economic growth.

Global petroleum firms Exxon Mobil and Total want to exit from Block 31 in Angola, Angolan oil minister Jose Botelho de Vasconcelos said separately at an energy conference in New Delhi.

He did not give any reason for the planned stake sale by Exxon and Total.

“In Block 31, some of the companies are leaving the block. Our state oil company Sonangol has the responsibility to find other partners," the minister said, without commenting on the likely deal size.

Earlier, the Economic Times reported that ONGC was in talks with the Exxon’s Angolan arm, Esso Exploration, to buy the US energy major’s 25% stake in Block 31 for about $2 billion.

A unit of French oil major Total has a 15% stake in the block, the paper said.

The block will produce 300,000 barrels of crude oil per day at its peak by 2012, the paper said, citing the website of the United States Energy Information Administration.

Shares in ONGC, valued at about $63 billion, was trading 1.5% higher at Rs1,322.80 at 0731 GMT in the main Mumbai market that was trading 1.7% higher.

ONGC last week posted a 6% rise in quarterly profit on higher earnings from crude sales, but missed street estimates on higher subsidy payouts.