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First India-China bid for an oilfield is successful

ONGC and China National Petroleum Corp have won the bid to acquire about 37% stake in the Syrian oilfields of Petro-Canada for $576mn.

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MUMBAI: The Oil and Natural Gas Corporation, along with and China National Petroleum Corp have won the bid to acquire about 37% stake in the Syrian oilfields of Canadian oil company Petro-Canada for $576 million or about Rs 2,600 crore.

ONGC and China National have formed a joint venture, Himalaya Energy Syria Ltd, to acquire the property.  This is the first time that Indian and Chinese companies have made a joint bid for energy resources abroad.

Earlier, the two firms were competing with one another. CNPC beat ONGC in the $4.2 billion takeover of PetroKazakhstan.

The two companies are sharing equity in a 50:50 ratio for the Syrian project.

In all, eight firms were in race for PetroCanada’s stake in Al Furat venture in Syria.

“It’s an important milestone. We have been working on this for some time. Instead of competing whereever possible we should work together,” petroleum secretary S C Tripathi said.

ONGC’s overseas arm ONGC Videsh Ltd had competed with the Chinese firms for oil properties in Central Asia, West Africa and Latin America.

They were pitched head-on for buying Canadian firm PetroKazakhstan, which has most of its operations in Kazakhstan, and EnCana’s Ecuador assets.

Shell, Europe’s second-largest oil company, and Petro-Canada,Canada’s third-largest, are among several companies that expressed interest in bidding for drilling rights offered in nine plots of land across Syria, Syrian oil minister Ibrahim Haddad said in a December 13 interview in Kuwait.

China and India have been competing for oil and gas reserves to feed their economies.

“China and India have rapidly growing economies and a challenge for them will be to finding energy assets,” said Frank Aquila, a mergers attorney with Sullivan & Cromwell in New York.

Other acquisitions by state oil companies this year include Russia’s OAO Gazprom $13 billion takeover of OAO Sibneft.

With inputs from Agencies

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