RIL, ONGC in race for UK’s Addax?

State-run Oil and Natural Gas Corp (ONGC) and Mukesh Ambani’s Reliance Industries (RIL) are rumoured to be the ‘mystery’ bidders for UK-based Addax Petroleum, which could be sold for £5 billion, a media report said here.

While China’s state-run Sinopec and Korean National Oil Company are already believed to be in talks with Addax, “the company has been approached by a third mystery bidder, possibly a national oil company from India,” a newspaper reported.

“...some traders noted gossip that an Indian group may be involved in the auction. ONGC, which last year bought Imperial Energy for £1.4 billion, and Reliance were touted as potential Indian suitors,” the report added.

London-based Addax Petroleum has fields in Iraqi Kurdistan and Nigeria and is said to be on the block for up to £5 billion (around $8.26 billion).

A formal offer for the company could be announced early next week, the report said, adding that “there was also chatter that Jean Claude Gandur, the billionaire chief executive of Addax, and his bankers, led by Tim Chapman of RBC, are keen to get a deal done quickly”.

Addax, which has one of only two operational fields in Kurdistan, has seen interest from would-be buyers increase with the completion of an oil-export pipeline from the region.
Chinese state oil group Sinopec is believed to have tabled a £4.8 billion offer for Addax Petroleum, a move aimed at securing China’s access to global oil reserves.

In recent years, China has struck a string of deals in Africa and Asia, but has not been so successful elsewhere. America blocked an $18.5 billion takeover of Unocal, an oil and gas group, four years ago, while last week, a combination of shareholder unrest and Australian nationalist sentiment scuppered plans for a Chinese group to take a large
stake in the miner Rio Tinto.

Meanwhile, the National Development and Reform Commission (NDRC), China’s powerful economic planning agency, has reportedly issued an order requiring Chinese companies to report intended overseas acquisitions to Beijing before they sign any legally-binding contracts, a move which could hinder Sinopec’s plans to buy Addax.

Earlier in December last year, ONGC had taken control of Imperial Energy Plc for £1.3 billion ($1.9 billion) after an overwhelming 96.8% of London-listed firm’s total shareholders accepted its takeover offer.

Imperial, the Leeds-based firm that has oil-producing blocks in Tomsk region of western Siberia in Russia and Kastanai in north-central Kazakhstan, was the biggest ever foreign acquisition by ONGC Videsh Ltd, the overseas arm of the state explorer.