Oil & Natural Gas Corp (ONGC), India's biggest energy explorer, is planning to sell dollar bonds to fund the $1 billion acquisition of a stake in oilfields in Azerbaijan, Bloomberg reported on Wednesday.
Hess Corp said in September it had agreed to sell its 2.72% stake in the large Azeri, Chirag and Guneshli(ACG) group of oilfields as well as its 2.36% stake in an associated pipeline to ONGC for $1 billion.
ONGC's foreign investment arm, ONGC Videsh Ltd, will buy the assets in a deal it expects to close in the first quarter of 2013. It is subject to Indian and other regulatory approval.
ONGC Videsh may raise almost the entire acquisition cost selling the notes next quarter, the report said, citing an unnamed source.
ONGC Videsh is seeking cheaper funds abroad as rupee borrowing costs are about twice as much, the report said.
The BP-operated ACG fields in the Caspian Sea account for the lion's share of Azeri oil production and are the main source of crude for a pipeline, which runs via Georgia to the Mediterranean port of Ceyhan in Turkey.