ONGC And Oil India In Talks To Acquire 50% of An Oil Field In Kenya
A number of persons familiar with the situation, India's flagship offshore oil business ONGC Videsh has found a new partner in Oil India Ltd to replace a reluctant IndianOil (IOC) for the probable acquisition of a 50% stake in Tullow Oil Plc's USD 3.4 billion oilfield project in Kenya. However, the OVL-OIL partnership is now being challenged by the super-aggressive Chinese energy behemoth Sinopec, which has entered the battle to take advantage of the Indian government's delay in finishing the transaction.
ONGC Videsh, the overseas arm of the state-owned Oil and Natural Gas Corporation (ONGC), was initially interested in purchasing half of Tullow, Africa Oil Corp, and TotalEnergies SE's holdings in the Lokichar oilfield in Kenya.
According to sources, the OVL board of directors accepted the deal, but the company intended to bring on board IOC, which had also expressed interest in the project. OVL-IOC negotiated the project stake for months. However, the acquisition was unable to be finalised because IOC began to have second thoughts, probably due to financial pressures caused by fuel sales losses.
Based on sources, when a Kenyan ministerial team attended the India Energy Week in Bengaluru, the Indian side informed them that IOC would not be participating, but that state-owned Oil India Ltd (OIL) would. However, the Chinese saw an opportunity after months of delays. Tullow and the other two partners in the project are currently receiving fillers from China Petroleum & Chemical Corporation (Sinopec).