Indian Oil Corp and Oil India Set to Acquire Gabon Oilfield

Indian Oil Corp and Oil India Set to Acquire Gabon Oilfield

1-5-2006
This could be the duo's second catch in the dark continent if the deal goes through. The IOC-OIL combine is in advanced talks with government authorities in the west African country, Gabon, to pick up a 90 percent stake in an oilfield. Although the exact deal size is not known, investment bankers have it that it could be between $300-500m. IOC-OIL had earlier managed to acquire a block in Libya through an open bidding process.

Industry sources said that talks have been on for quite some now and the duo are expected to put in a formal bid shortly. The bid would be to acquire a 90 percent participating interest in a farm-in offer for block FT 2000 in Gabon. "By all indications the IOC-OIL consortium is well positioned and may end up clinching the deal," sources in the merchant banking circles said. It is, however, unclear whether there are others in the race as well. IOC has entered into an MOU with OIL to take up interests in the upstream sector.

The block is located in the interior sub-basin of Gabon and is close to the British Gas discovery -- Remboue field. The combine has engaged UK-based Exploration Consultants (ECL) as technical consultants for the block. Initial assessment of the reserves are promising and this block could give the consortium a toehold in this oil-rich African nation. The acquired stake will be shared equally by both the consortium partners who will have a 45 percent share each. The residual stake of 10 percent will however be retained by the Gabon government either directly or through a state-run company.

The government has recently given special powers to this consortium to seek approvals from the empowered committee of secretaries instead of the cabinet to quicken the process of bidding for overseas oil assets.