ONGC Videsh loses buyout bid in Angola oil block

ONGC Videsh, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), has lost bid to buy US energy major Exxon Mobil's 25% stake in a deep-sea oil block in Angola.

"OVL had last year bid around $2.1-2.2 billion for the 25% stake in Block 31 in Angola. However, Exxon has at least one offer which is better than this," a source in know of the development said.

British energy firm BP Plc is the operator of the ultra- deep sea block with 26.7% stake.

"We don't yet know who has bid more than OVL but it will be fair to guess that it might be a Chinese, Korean or even a Thai company," he said.

Exxon had last month told OVL that it was not the highest bidder for Block 31.

"It is not that OVL is out of the race. They have an option to hike their bid. But more importantly, if the company at the forefront is not liked by Angolan government, Exxon may be forced to go to other bidder," the source said.

Block 31 is expected to produce 1,50,000 barrels of crude oil per day (7.5 million tons a year) and output is expected to start in 2012.

In all 19 oil discoveries have so far been made in the block.

French oil major Total SA's subsidiary TEPA hold 5% interest in the block.

OVL had in 2004-05 lost out on acquiring 45% stake in the giant Akpo oilfield in Angola.

The government had rejected OVL proposal due to Akpo's ownership issues.

After Indian government disallowed OVL to pursue the Akpo opportunity, China's CNOOC Ltd acquired the 45% stake for $2.268 billion.

Sonangol is the concessionaire of Block 31.

BP Exploration (Angola) as operator holds 26.67%.

The other interest owners in Block 31 are Sonangol P&P (20%), Statoil Angola A.S. (a subsidiary of StatoilHydro ASA)(13.33%), Marathon International Petroleum Angola Block 31 Ltd (10%) and TEPA (BLOCK 31), (a subsidiary of the Total Group) (5%).