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| IOC-OIL may hike its 400 mn pound bid for Gulfsands |
| Press Trust of India / New Delhi Mar 21, 2010, 19:20 IST |
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State-owned Indian Oil Corporation (IOC) and Oil India combine may hike their takover offer for Middle East-focused oil firm Gulfsands Petroleum Plc after the UK-based firm rejected their 400 million pound bid.
"Yes, I can confirm that IOC-OIL combine did make an offer for Gulfsands Petroleum," a source closely linked to the transaction said. "The offer was in the range of 400 million pound."
The Syria-focused oil explorer on Friday said it had rejected an unsolicited offer by an company it did not identify, for being too low. "The board is unanimously of the view that the proposal is wholly inadequate and materially undervalues the company," Gulfsands said in a statement.
"The rejection does not mean the transaction has fallen through. They (IOC-OIL) can raise the offer, which they should but the two companies are yet to put their heads together on the issue," the source said.
Gulfstone, which has oil properties in Syria and the Gulf of Mexico, produces 14,000-17,000 barrels of oil per day.
IOC-OIL have teamed up for acquiring overseas assets and share cost and investment in 50:50 ratio.
The source said IOC and OIL would hold consultations shortly to decide on the future course of action.
Gulfsands, however, said that it is not currently involved in any process to solicit offers and is confident of its strategy to become a preeminent exploration and production company in the Middle East and to continue to demonstrate tangible growth.
The Indian firms have been in preparation for the acquisition for six month and are being advised by Seymour Pierce. They approached several of Gulfsands' large UK institutional shareholders, including Schroders, which holds 22 per cent stake in Gulfsands, before making its bid.
IOC-OIL may have offered 350 pence a share and it is reported that the board of Gulfsands' was not willing to accept any offer below 400 pence.
Gulfsands owns a 50 per cent stake in a block in Syria that produces about 11,000 barrels of crude oil per day. It also owns interests in 44 blocks, including 30 producing blocks, off the coast of Texas and Louisiana.
IOC and OIL, who had overseas ambitions, were in December 2005 allowed by the government to jointly bid for oil and gas properties. The two have been pursuing acreages in Africa, Middle East, South-East Asia, South America, CIS countries and Russia.
The two firms currently have a portfolio of exploration blocks in Gabon (one onshore exploration block), Iran (one offshore discovered oil and gas block), Libya (three onshore exploration blocks), Nigeria (one onshore exploration area) and Yemen (two exploration blocks).
If successful, Gulfsands would be their first overseas acquisition. This would be just the second London-listed company acquired by an Indian state-run firm, the first being Imperial Energy Plc by Oil and Natural Gas Corporation.
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