Oil India Ltd., the nation’s second- biggest state-run oil producer, is in talks to buy a stake in Etablissements Maurel & Prom SA’s assets in Gabon, three people with direct knowledge of the matter said. Oil India is studying the fields and plans to appoint banks for financial due diligence soon, two of the people said, asking not to be identified because the talks are private. Maurel wants to sell a controlling stake in the fields, which may be valued at more than $1.5 billion, one person said.
Oil India and Oil & Natural Gas Corp., the country’s biggest explorer, are seeking access to deposits as energy demand in the world’s second-most populous nation rises. Oil India wants to buy shale gas assets in Canada and Australia and has held initial talks with Calgary-based Americas Petrogas Inc. about acquiring the company’s shale gas fields in Argentina, two of the people said. “If India has to continue growing at 7 to 8 percent, oil consumption will increase and it will be necessary to have control of supply,” said Vienna-based Juergen Maier, who helps manage about $1.3 billion of emerging-market shares including Indian shares, at Raiffeisen Capital Management. “Companies and countries that own production and reserves across the world will be better off than others.” Oil India rose as much as 1.4 percent and was 1.1 percent up at 1,291.90 rupees at 9:22 a.m. in Mumbai trading, valuing the company at about $7 billion. Maurel jumped 4.6 percent in Paris yesterday to close at 16.67 euros.
An Oil India spokesman declined to comment. A spokesman for Maurel said he couldn’t immediately comment. Americas Petrogas Chief Executive Officer Barclay Hambrook declined to comment.
Citigroup, BNP Paribas
Maurel hired Citigroup Inc. and BNP Paribas SA around April 2010 to search for partners for exploration permits it holds, Chief Executive Officer Jean-Francois Henin said April 1. Paris- based Maurel’s production from Gabon at the end of the year is likely to be 20,000 barrels a day, Henin said last month.
India imported about 3.3 million barrels of crude a day in the year ended March 31, equivalent to about 83 percent of the total oil processed by the country’s refiners, according to oil ministry data. Oil India produced 72,000 barrels a day in the period, the ministry data show. Oil India, based in Duliajan in India’s northeastern state of Assam, operates an onshore oil field in Gabon, according to the company’s website. It is a partner in areas in other nations including Nigeria, Sudan, Yemen, Timor Leste and Venezuela.
The company plans to sell debt outside India to fund an acquisition and is in the process of getting rated by Moody’s Investors Service, one of the people said. Oil India had 127 billion rupees ($2.9 billion) in cash and equivalents and no debt as of March 31, finance director T.K. Ananth Kumar said May 31. The explorer may use as much as 45 billion rupees for acquisitions, he said that day.
Indian energy companies are competing with Chinese firms for deposits across the world to meet growing demand from the two most populous nations. Oil India, ONGC and Indian Oil Corp. joined Repsol YPF SA and Petroliam Nasional Bhd. in February last year to pump and refine oil from the Carabobo 1 region in Venezuela’s Orinoco Belt. Oil India and Indian Oil withdrew a joint offer for Gulfsands Petroleum Plc in May last year after failing to get a response to do due diligence on the U.K. explorer with assets in Syria.