UK's Cairn Energy wary of ONGC dominance
Subir Raha, chairman of ONGC had earlier said a bid for Cairn's oilfields in the country was "one of the opportunities we are looking at".india Updated: Mar 04, 2006 18:50 IST
As ONGC shows interest in buying Cairn Energy's assets in India, it has raised concern that Europe's largest independent oil company might be swallowed by a larger rival.
Shares in the Edinburgh-based company rose 30p to £19.97 on Friday after Subir Raha, chairman of ONGC said a bid for Cairn's oilfields in the country was "one of the opportunities we are looking at".
Cairn's Indian assets have been valued at about £2 billion. They include extensive oilfields in the desert of Rajasthan which, when Cairn discovered them in 2004, marked the largest finds in India for 22 years.
Rajasthan changed Cairn's fortunes, pushing the shares up 400 per cent since January 2004 and making it the largest oil and gas company below national majors such as Shell and BP.
Cairn also operates in Bangladesh and Nepal. The Rajasthan fields are still in the exploration phase. If they meet expectations, they should more than double Cairn's daily delivery to 250,000 barrels.
ONGC is Cairn's exploration partner in India. If it tables a bid it would be buying Cairn's largest and fastest growing part of the business.
Cairn, which reports full-year results on March 14, made no comment on the possibility of a closer tie-up with ONGC.