Italian promoter in talks to sell 47% in HOEC

ENI, said sources, planned to sell 61.5 mn shares anywhere between Rs 135 and Rs 140 a share

Eni, the Italian petroleum exploration and production company, which holds 47.18 per cent in Hindustan Oil Exploration Company (HOEC), is in talks with US-based Anadarko Petroleum Corporation to sell its entire stake.

According to banking sources familiar with the development, Eni, a promoter of HOEC, with its thin portfolio of exploration assets, plans to exit the business.

Eni, said sources, plans to sell 61.5 million shares anywhere between Rs 135 and Rs 140 a share.

An email to Eni and HOEC didn’t get any response.

If the deal goes through, this would be at a Rs 35-40 premium to HOEC’s scrip price, which closed at Rs 100.70 on the Bombay Stock Exchange today.

At this price, Eni could realise anywhere between Rs 831 and 861 crore through the deal.

“The deal has been in the works for sometime. Eni had approached some national oil companies also to sell its stake, but they were not interested,” said a banker.

John Christiansen, director, external communications, Anadarko Petroleum Corporation, said, "As a matter of policy, we do not comment on rumours."

An official with Oil India confirmed the development, but declined to comment on the details. Sources said Hindustan Petroleum Corporation was also looking at the deal.

While HDFC holds 11.36 per cent in the company, Rakesh Jhunjhunwala and his wife together hold 6.13 per cent shares. Other minority shareholders include Nomura Singapore, Reliance Capital Trustee and General Insurance Corporation of India.

HOEC holds two blocks in the Cauvery basin, four in Cambay basin, two in Rajasthan and one in Assam.

The company's PY-1 Gas Field in Cauvery basin has seen a downtime of 44 per cent on account of no off-take of gas due to downstream constraints, aggravated by the unexpected behaviour of the reservoir. Its PY-3 oil field has been shut since July 2011 on pending submission of a comprehensive field re-development plan.

These hiccups resulted in a 60 per cent production shortfall against the previous year.

Anadarko is the operator of the Offshore Area 1 Block, with a 36.5 per cent working interest. Other partners include Mitsui E&P Mozambique Area 1 Limited (20 per cent), BPRL Ventures Mozambique B.V. (10 per cent), Videocon Mozambique Rovuma 1 Limited (10 per cent) and PTT Exploration & Production Plc (8.5 per cent).