Cairn and ONGC still discussing sale of India assets

Vol 7, PW 14 (24 Sep 03) News in Brief

ONGC and Cairn Energy have not yet reached final agreement over the purchase of part of Cairn's Indian portfolio.

ONGC's board of directors were to discuss the issue in Delhi on 11th September, but didn't. "Agreement could not be reached over certain crucial issues," we are told.

"The contours of the discussion are still changing." Present indications are that the topic is likely to be discussed by the ONGC board on 24th September. Disagreement centres on the exact equity stake Cairn is willing to offer ONGC in block CB-OS/2 in Gujarat, which has the prolific Laxmi and Gauri gasfields and also the prospective Gauri oilfield.

Also at issue are the NELP blocks that ONGC wants Cairn to farm-in to as a barter agreement. One thing is certain: any deal needs final approval from the federal cabinet before ONGC and Cairn sign a sale-purchase agreement.

As part of the deal, Cairn and ONGC may jointly bid for blocks in NELP-IV which closes on 30th September.