ONGC To Buy Cairn Energys Stake In 2 Blocks For $100 Million

New Delhi, September 29: | Updated: Sep 30 2003, 05:30am hrs
Oil and Natural Gas Corporation (ONGC) will pick up Scottish energy major Cairn Energy Plcs stake in two oil and gas blocks in Bay of Bengal and Gujarat offshore for a consideration of about $100 million.

While a formal announcement will be made shortly by ONGC and Cairn, company sources said that ONGC will acquire Cairns 90 per cent stake in deepsea block kg-dwn-98/2 in the Krishna Godavari basin, off the Andhra Pradesh coast.

Alongside, ONGC will also pick up 10 to 15 per cent stake in shallow water cb-os/2 block of Cairn Energy, off the Gujarat coast.

We have reached an understanding with cairn energy for buying their stake in the two blocks, ONGC chairman and managing director subir raha told a news conference on Monday.

In return, Cairn will also get 15 per cent stake in ONGCs Ganga valley block Gv-onn-2000/1 and cambay basin block cb-onn-2001/1.

ONGC currently has 85 per cent stake in gv-onn-2000/1 while the remaining is with Indian Oil (IOC). It holds 100 per cent stake in the cambay basin. Both these onland blocks were awarded to ONGC in new exploration licensing policy rounds I and II (NELP I and II).

Cairn had earlier offered to sell its 85 per cent stake in blocks kg-dwn-98/2 and kg-os/6 (also in kg basin) for $100 million. However, ONGC was not interested in kg-os/6 block and wanted only kg-dwn-98/2 which lies next to Reliance industries gigantic gas find and instead wanted stake in cb-os/2, where five oil.