Angola acreage uncertain for Indian Oil and Oil India

Vol 11, PW 5 (12 Jul 07) People & Policy

Indian Oil and Oil India are holding back on a decision to bid for discovery Block 16 in Angola, belonging to US based Devon Energy.

PETROWATCH learns IOC and Oil India are likely to take a decision to acquire an undisclosedstake in the 4900-sq km block on July 16th, two days before the last date for bid submissions on July 18th.“Any decision will be takenwhen the financial consultant gives its report after carrying out a valuation,â€‌ reports a source in the financial community.

“They will give IOC and Oil India a figure to be quoted and withthisfigure in hand the managements of both companies can make a decision.â€‌ IOC and Oil India have asked their financial consultant to submit the valuationonor before July 16th.

Last month IOC and Oil India appointed technical and financial advisers to evaluate the block, which sits in water depths of 200-1500 meters. "The technical evaluation is complete," we hear.

"But the datathat was evaluated isnot very encouraging." Senior management officials from IOC and Oil India met atOil India's office in Delhi on July 10thto discuss the potential acquisition.Representatives from thefinancial consultant were also present.

"Indian Oil and Oil India have formed a joint working group that meets regularly to discuss various opportunities which come their way," we are told. "There was nothing unusual discussed in this meeting." An industry source adds:"Despite the fact that the technical evaluation of Block 16was not very encouraging, IOC and Oil India are still pursuing the opportunity because a lot of time and money has been spent on it."Attending the meeting were IOC director business development BM Bansal, Oil India director business development JK Talukdar, Oil India director finance Ananth Kumar and other officials involved in the project.

In May, we reported that Scotia Waterous is marketing Devon Energy’s interest in Block 16. “Two oil discoveries were made at the block,â€‌ says a source.

“One was the Bengo discovery in 1994 and the other was the Longa discovery in 1995.â€‌ No oil is being produced at Block 16 for now.