Oil & Natural Gas Corp. (ONGC) may not get Exxon Mobil's 25% stake in the Block 31 exploration block in Angola due to a higher bid from another company, its chairman said Tuesday.
"We had participated in the bid. It is likely that we haven't won. Looks like someone else may have bid more," A.K. Hazarika told Dow Jones Newswires.
Hazarika said state-run ONGC had bid about $2.1 billion. He declined to say which company or companies may have bid higher than ONGC.
ONGC, India's largest oil explorer by output, is seeing oil production stagnate at its aging oilfields in the country as reserves deplete.
It expects its crude oil production in the current financial year to be 24.8 million metric tons, almost the same as the previous year. ONGC said production will remain flat in the next fiscal year and rise from 2012 onwards as some new marginal fields come into production.
In order to ramp up oil production and to secure India's energy needs in the long term, the federal government has mandated ONGC to invest in oil assets overseas.
The company has had some successes, but in regions such as West Africa, cash-rich Chinese companies have dominated. West Africa's oil production has historically been from onshore or shallow-water fields, but exploration activity has moved to deeper areas offshore.
ONGC Videsh Ltd., the overseas investment arm of oil and gas explorer ONGC, had submitted a binding bid to acquire a 25% stake in the Block 31 ultra-deep oil block in Angola, the Indian government said in December.
BP is the operator and 26.7%-owner of Block 31. The other shareholders include Exxon Mobil's Esso unit with a 25% stake, Statoil with 13.3% and Marathon Oil with 10%. French oil major Total sold its 5% stake to China Sonangol International Holding Ltd. at the end of 2010.
Angola's state-owned Sociedade Nacional de Combustíveis de Angola, or Sonangol, is the concessionaire of the block and owns a 20% stake.
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