India to collaborate more with China on foreign oil assets

Dec 21, 2005 (NEW DELHI) — Oil and Natural Gas Corp (ONGC) is to explore the possibility of further collaborations with China in the future after it joined forces with China National Petroleum Corp (CNPC) to buy a 38 pct stake in Syria’s Al Furat Petroleum Co, media reports quoted ONGC chairman Subir Raha as saying.

“The Syrian acquisition is a major breakthrough for us,” he told the Business Standard newspaper.

“We’re very excited because this is the first time an Indian company has acquired an oil property along with a Chinese company.”

“This will be a pace-setter for more such deals along the oil and gas value chain,” he was quoted by the The Economic Times as saying.

The acquisition must now be formally approved by the Syrian government, reports said.

A CNPC official said the Chinese state oil company and ONGC will set up a 50-50 joint venture to hold the stake in the Syrian oil firm.

CNPC will pay 338 mln cad for its share of the previously announced acquisition price of 676 mln cad, though that may be subject to adjustment after due diligence.

“It’s an important milestone. We have been working on this for quite some time. Instead of competing wherever possible, we should work together,” said Indian Petroleum Secretary SC Tripathi.

ONGC and CNPC are both stakeholders in an oilfield in Sudan alhough they did not bid for it jointly.

The announcement came shortly before Indian Petroleum Minister Mani Shankar Aiyar’s visit to Beijing scheduled for January.

Aiyar is expected to be in China for about a week starting Jan 10 to look for more collaborations between the two countries in the energy sector.

(AFX)