ONGC to buy US co’s assets In Talks With ConocoPhillips For $5Bn Acquisition Of Oil Sands

Mumbai: In what could be termed as India's biggest acquisition in recent years, stateowned ONGC is in an advanced stage of negotiations to buy out half-a-dozen oil sands assets owned by US major Conoco-Phillips in Canada. The potential size of the deal is pegged at $5 billion as the assets currently produce 12,000 barrels per day (bpd) of oil and have the potential to produce 5,00,000 bpd, said a source with knowledge of the development. 

    "We are working on it and the deal is yet to be finalized. We will be in market to raise funds as soon as the deal is sealed. We may look at ECB and other options available with us," said a senior ONGC official without divulging more details. 
    ONGC had signed a memorandum of understanding (MoU) with Houston-based ConocoPhillips in March for cooperation in exploration and development of shale resources in India, North America and elsewhere, besides deep water opportunities off the eastern coast of India. 
    This deal is the result of such broader MoUs and may result in ONGC divesting stake in some of its deep water blocks with discovered gas reserves to bring them to production in line with RIL divesting 30% stake in 21 oil blocks in favour of BP for $7.2 billion. 
    "ConocoPhillips has extensive experience in the field of shale gas exploration and exploitation in the US and holds large acreage position, while ONGC's endeavour in shale gas is at a nascent stage. The cooperation between the two majors is expected to accelerate the learning's in shale gas for the mutual benefit of both the companies," said an ONGC statement at the time of signing of the MoU. 
    Meanwhile, ONGC and Chinese major CNPC signed another MoU last month seeking to establish and consolidate their energy portfolios globally and triggering speculation that ONGC may rope in CNPC as partner for Conoco-Phillips oil sands assets in Canada as the later has also learnt to have envisaged interest in those assets. 
    Both firms jointly own stakes in oil assets in Syria, Sudan and the Myanmar Pipeline Project.

The assets produce 12,000 bpd of oil and have the potential to produce 5,00,000 bpd