ONGC Rejects BG Bid for Oilfield

ONGC has rejected another bid by BG Group Plc to become an operator of three offshore oil and gas fields. BG is trying to become the operator of the three fields off India's western coast by acquiring a 30 percent stake in a venture that included Enron Corp for $388 million. ONGC owns 40 percent and Reliance Industries owns the remaining 30 percent in the Panna, Mukta and Tapti fields, considered some of India's top discoveries in the last two decades.

"BG offered a cash settlement on December 20, asking us for a reply by the 21st afternoon, and we said the offer was not sufficiently responsive," stated Subir Raha. "BG went and made a deal with Enron and asked us to give them operatorship saying they could improve the running of the fields," said Raha. "We asked them: what makes you think we can't do the same?" he said.

ONGC first rejected BG's plan to acquire a stake in the fields in November, and has said it wants operatorship itself. BG's offer is conditional on being granted operatorship of the fields with full control over their day-to-day management. Then British Gas tried unsuccessfully to solve the dispute by offering ONGC the right to manage another field in Brazil if it relinquished its claim to operate Panna, Mukta and Tapti. The Panna-Mukta fields have recoverable reserves of 184 million barrels of oil and oil equivalent in gas, and the Tapti gas field has reserves of 96.3 million cubic meters of gas.