ONGC, Sinopec Buy Half of Colombian Oil Company

BEIJING Aug 15, 2006 (Dow Jones Newswires via The Wall Street Journal Asia)

China and India have bought part of an oil company in South America, the second time the world's two biggest emerging economies have put aside their longstanding energy rivalry to work together.

India's state-owned Oil & Natural Gas Corp. (500312.BY) teamed up with Chinese government-owned Sinopec Group, China's second biggest oil company by output, to buy half of an oil company in Columbia called Omimex de Columbia, Indian Oil Minister Murli Deora said Tuesday.

Omimex is owned by U.S.-based Omimex Resources Inc.

Deora didn't reveal the two companies had paid, and Sinopec officials declined to comment.

China and India both have been seeking new supplies to satisfy their rapidly growing demand for oil. In the past they have tried to outbid each other for oil supplies in places like Africa and Central Asia.

Their bidding wars over international energy resources which have sometimes pushed prices higher.

More recently, officials from the two countries have talked about going after international oil blocks together. State-owned companies from India and China have already taken a stake in a Syrian oil field that was previously owned by a Canadian firm. In January, the two signed a framework for cooperating in the energy sector.

"China and India should go to the international market together," Deora said in a telephone interview.

"That is a better way to buy oil properties," he said, adding "unnecessary competition is not good."

Still, analysts are skeptical China wants to share the spoils with India. In several cases, Chinese firms have outbid India despite the talk of cooperation.

Copyright (c) 2006 Dow Jones & Company, Inc.


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