Cairn offers India assets to ONGC for $ 3.8B

By agencies   |   Friday, 24 February 2006, 08:00 Hrs
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NEW DELHI: Scottish energy giant Cairn Energy is believed to have offered to sell its Indian assets, which include the 1-billion barrel oilfield in Rajasthan, to state-owned Oil and Natural Gas Corporation (ONGC) for $ 3.8 billion and may launch an initial public offer (IPO) if the sale failed.

Cairn made the offer to sell-off its 22.5 percent stake in the Ravva oilfield, which produces about 50,000 barrels of crude oil per day, and majority ownership in RJ-ON-90/1 block in Rajasthan, where more than a dozen discoveries have been made establishing over 1 billion barrels of oil reserves, in December 2005, industry sources said.

The $ 3.8-billion asking price was also for Cairn’s interest in Cambay Basin block CB/OS-2, home to 130 million standard cubic feet per day producing Lakshmi and Gauri gas fields and a potential oilfield.

However ONGC officials say the asking price is “too high” and has put a figure of $2-2.2 billion.

Sources said the relatively small Cairn, did not have the $ 2-billion required for developing the Rajasthan oilfield and building the refinery to process the crude, was also planning an IPO to raise finances and list the Indian subsidiary on local bourses in a year’s time.

ONGC is already partnering Cairn in Ravva and Cambay basin fields and had proposed to jointly build a $1.8 billion refinery at Rajasthan.

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