NEW DELHI Jan 03, 2007 (Dow Jones Newswires)
Oil and Natural Gas Corp. (500312.BY) is in talks with several multinational petroleum exploration companies for offering possible stakes in its deepwater exploration blocks off India's coast, said a senior ONGC executive.
The companies include Italy's ENI S.p.A (ENI.MI), Britain's BG Group Plc (BG.LN) and Brazil's Petroleo Brasileiro SA (PBR), or Petrobras.
"We (ONGC) are looking for partners for our deepwater blocks," the executive said.
Negotiations are at a preliminary stage, with details yet to be finalized on which blocks and how much equity will be offered, said the executive.
Among the blocks that are likely to be offered are one off India's eastern state of Orissa, MN/DWN 2000/1, where a stake may be offered to ENI under an equity swap arrangement.
A spokesperson for ENI said the company would not comment on speculation.
ENI and ONGC have a cooperation agreement under which the two companies can swap equity in upstream and midstream deepwater exploration activities in India and other countries.
Last year, ENI was awarded two exploration blocks in India.
ONGC, India's largest oil and gas producer, needs partners who can bring in technology and expertise in deepwater exploration.
Petrobras has the expertise required to explore and extract gas from ultra deepwater blocks.
In 2005, ONGC and BG Exploration and Production India Ltd., a unit of BG, entered into a joint venture to develop three deepwater blocks off India's eastern coast.
ONGC last made a major oil discovery at its Mumbai High Offshore field several decades back and has lately been struggling to maintain its crude oil output due to aging oil fields.
A major oil discovery would also help India, which relies heavily on imported crude to meet nearly three-quarters of its requirements.
Copyright (c) 2007 Dow Jones & Company, Inc.
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