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CNPC, ONGC bid jointly for Syrian oilfields

It is the first time the Chinese and Indian oil giants have joined forces in their efforts to secure reserves to feed their booming economies.

india Updated: Nov 25, 2005 15:58 IST

The flagship state energy firms of China and India, normally arch-rivals in the race for overseas oilfields, are teaming up for the first time to bid for a $1 billion package of assets in Syria.

China National Petroleum Corp and India's Oil and Natural Gas Corp (ONGC) are bidding for Petro-Canada's interest in a major Syrian oil and gas joint venture with Royal Dutch Shell, a person close to the situation said on Friday.

There are other bidders for the assets, the source said, without elaborating.

It is the first time the Chinese and Indian oil giants have joined forces in their efforts to secure reserves to feed their booming economies, which require more and more imported oil.

Petro-Canada said in September it might sell its 38 per cent stake in the Shell-operated Al Furat venture in Syria, which accounts for about 70,000 barrels of oil equivalent of the company's daily output.

The Al Furat venture pumps as much as 50 percent of Syria's production, according to Petro-Canada's Web site. It produces oil and gas from 36 fields with 220 wells in three concession areas.

The Syrian assets being sold by Petro-Canada are valued at about $1 billion or more, said the source, who spoke on condition of anonymity. This is higher than some analysts' estimates.

The assets could fetch $800 million to $900 million in proceeds, Scotia Capital analyst Greg Pardy wrote in a note to clients in September.

ONGC has been beaten by China's state oil giants in the $4.2 billion takeover of PetroKazakhstan and the $1.4 billion Ecuador oil field sale by North American producer EnCana.

Industry sources earlier this month said that CNPC -- the parent company of Hong Kong and New York-listed PetroChina -- and ONGC were forming a partnership for an overseas acquisition but they declined to reveal the target.

A CNPC spokesman was not immediately available for comment. ONGC Chairman Subir Raha declined to comment.

The source and analysts said Petro-Canada was selling the assets to reduce its political risk profile and to concentrate on other assets in which it has operating control.

Petro-Canada shares last traded at C$43.58 on the Toronto Stock Exchange.

ONGC is bidding for a stake in a Nigerian offshore field with an estimated value of $1 billion, sources familiar with the situation told Reuters earlier this week.

The stake in the yet-to-be-developed Akpo field, operated by French oil company Total SA, was put up for sale earlier this year by Nigerian firm South Atlantic Petroleum Ltd., which is controlled by former Nigerian Defence Minister Theophilus Danjuma, sources have said.

First Published: Nov 25, 2005 15:56 IST