State-owned Oil and Natural Gas Corporation (ONGC), Indian Oil (IOC) and Oil India (OIL) have made a joint bid of $5 billion for buying stake in six Canadian oil sands assets of US energy giant ConocoPhillips.
"We had, a few weeks back, placed a non-binding bid for a stake in the six Alberta properties of ConocoPhillips," a source at one of the three state-owned firms said.
Houston-based ConocoPhillips has since then closed bidding for selling as much as 50 per cent of its oil-sand reserves in Alberta.
"There are some producing assets and some exploration assets on offer," he said without giving more details.
ONGC Videsh, the foreign arm of the state explorer, had bought US energy firm Hess Corp's stake in Azeri, Chirag and Guneshli group of oil fields in Azerbaijan for $1 billion.
ConocoPhillips has hired Scotia Waterous for selling stake in six Alberta properties that produce 25,000 barrels of oil a day from an estimated 30 billion barrels of bitumen in place. Development of these reserves could increase production to more than 500,000 bpd.
DK Sarraf, Managing Director of ONGC Videsh, said the company keeps looking at opportunities and would not comment on a transaction.
He said North America continues to attract global investors as it has "huge tradeable resources."
Asked if properties in North America continued to be attractive, given firms like BHP Billiton, BG Group and Canada's Encana have written down value of shale gas assets, Sarraf said: "It is only a question of time when these assets will become valuable again. The values will go up again once the price of natural gas in the US and North America goes up. Prices are bound to go up."
ConocoPhillips has been looking to sell assets in a number of countries, including Nigeria, as part of a global restructuring. Of its six properties on offer in Canada, only Surmont, run in a joint venture with France's Total SA, is producing oil. Located south of the oil sands hub of Fort McMurray, Alberta, the steam-driven development pumps 25,000 barrels a day.
The partners are working to boost that to 136,000 bpd, starting in 2015.
The other properties are the Thornbury, Clyden, Saleski, Crow Lake and McMillan Lake assets. The land totals 715,000 acres.
ConocoPhillips had in 2010 sold its interest in the Syncrude Canada oil sands mining venture to Sinopec for $4.7 billion.