Indian firms bid for Conoco Canada oil assets - sources

Three Indian oil firms have bid $5 billion for Canadian oil sands assets of U.S.-based ConocoPhillips , company sources said on Monday, as the energy-hungry country's output from local and foreign fields falls.

India is the world's fourth-biggest oil importer, buying nearly 80 percent of its oil needs from abroad. With fuel demand and refining capacity rising, the government has told state firms to secure energy assets overseas to help power the expanding economy.

The Comptroller and Auditor General (CAG) last month flayed the country's biggest oil explorer Oil and Natural Gas Corp. , whose output has been almost stagnant for years, for its tardy pace of exploration and lax efforts in development.

 

"We have bid along with Oil India and Indian Oil Corp. ," a source at ONGC Videsh, the overseas investment arm of ONGC, told reporters on Monday. A source at Oil India said the bid was submitted at the end of July.

ConocoPhillips said in January that it was selling a stake in six Alberta properties that produce 12,000 barrels of oil a day (bpd) from an estimated 30 billion barrels of bitumen.

ONGC Videsh announced a shift in policy last year, when its then managing director, Jomen Thomas, said his firm would seek to buy assets in politically less risky regions such as North America to cut its risk and boost output.

It aims to invest $20 billion to help increase its output seven-fold by 2030.

In 2011/12, ONGC Videsh produced 7.4 percent less oil and gas output than a year earlier, at about 175,000 bpd.

Managing director D. K. Sarraf said on Monday that oil and oil-equivalent gas output from the company's assets may also decline in the current fiscal year due to geopolitical problems in Sudan and Syria. He said he hoped output would improve in 2013/14 when new fields including those in Myanmar's A1 and A3 blocks are commissioned.

Sarraf declined to comment on a bid for ConcoPhillips but said: "The market (for mergers and acquisitions) is reasonably good. There is a lot of action in North America, Canada as huge credible resources are there".

ONGC Videsh recently bought the 2.7 percent stake of Hess in the large Azeri, Chirag and Guneshli (ACG) group of oil fields in Azerbaijan and ONGC Chairman Sudhir Vasudeva said his firm could supply that equity oil to its refining unit MRPL , which recently raised capacity to 300,000 bpd.

MRPL buys Azeri light crude through spot tender and short-term deals. The move will help MRPL in replacing some of the oil it used to buy from Iran, as western sanctions aimed at curbing Tehran's nuclear programme disrupt shipments.