India may bid for Kazakh Oil sought by CNOOC
(Bloomberg.com)
Updated: 2006-01-13 19:08

India's Oil & Natural Gas Corp. may enter the bidding for a $2 billion Kazakh oil producer sought by China's Cnooc Ltd., as competition intensifies for energy reserves.

A woman walks past the headquarters of the state-run energy firm China National Offshore Oil Corporation (CNOOC) in Beijing, in June 2005. China's largest gas and oil producer CNOOC said it had agreed to buy a 45 percent stake in an oil block off the coast of Nigeria for almost 2.3 billion dollars. [AFP]

Oil & Natural Gas hasn't made an offer yet, a company official said, asking not be identified. Nations Energy Co., a Canada-based company whose main asset is an oil field in Kazakhstan, is a target for Cnooc after China National Petroleum Corp. withdrew interest, Hong Kong's Standard said, citing unidentified people.

Any entry by India would pit its state-run oil company against a Chinese rival for the fourth time in six months. This week, Cnooc said it agreed to buy a stake in a Nigerian oil field for $2.27 billion, a month after India's government blocked Oil & Natural Gas's plan to buy the interest.

"The companies are now cash-rich and that money needs to be put to use," Gavin Thompson, Beijing-based country manager at energy consultants Wood Mackenzie Ltd., said in a telephone interview today. "They need to grow. They need to replace reserves and they can't do it domestically, especially for liquids production so they need to go overseas. There's also a pitch for reserves for China."

Cnooc bought the Nigerian stake five months after its $18.5 billion takeover bid for Unocal Corp. failed amid opposition from U.S. lawmakers.

India has been in talks with Kazakhstan's government on oil field acquisitions in the central Asian nation after it lost out to China National Petroleum Corp. in a bid to buy PetroKazakhstan Inc. Mani Shankar Aiyar, India's oil minister, said in an interview on Jan. 9 he had spoken to a government minister in Astana about getting a part of the Kazakh government's stake in PetroKazakhstan.