India on Tuesday said it had no regrets of giving away a Nigerian oil field to arch rival China, which ONGC Videsh Ltd had won defeating Chinese firm China National Offshore Oil Corporation, saying the asset was too risky.
The Cabinet had last month stopped OVL, the overseas arm of state-owned Oil and Natural Gas Corp, from acquiring 45 per cent stake in Nigeria's OML 130 oil area, also known as the Akpo field, which would have given the energy-hungry nation 3.5 million tonnes of crude oil annually for 20 years.
Petroleum Minister Mani Shankar Aiyar said the decision to back-off the deal at the last minute was taken "quite deliberately... there are absolutely no regrets."
He said the Cabinet felt the opportunity was not worth pursuing even though OVL had projected that the just over $2.3 billion acquisition cost for the 45 per cent interest and the further $2.25 billion investment in developing the field would have been recovered in less than 4 years time.
Declining to give reasons for Cabinet's refusal, Aiyar said, "The terms appeared more favouring the Nigerian seller."
Cnooc on Monday announced the acquisition of the 45 per cent interest held by Nigeria's South Atlantic Petroleum Ltd for $2.268 billion. Its chief financial officer Yang Hua said, "OML 130 is one of the rare assets in the market, located in one of the most productive oil basins. The operator of the block is Total (of France), which is one of the leading deepwater oil exploration companies in the world. The local partner in the block is also a strong partner. It's a combination that can benefit Cnooc."
Total holds 24 per cent interest, Brazil's Petrobras owns 16 per cent and the rest is with South Atlantic and state-run Nigeria National Petroleum Corp.
Cnooc in a statement said its acquisition price was $4.6 per barrel of oil equivalent, the same as what OVL had bid.
The purchase was the third in the past five months in which China had either outbid India or accepted greater risk. In August, China National Petroleum Corp beat India by agreeing to pay $4.18 billion for PetroKazakhstan Inc.
The Chinese company in September outbid ONGC in buying assets of EnCana Corp in Ecuador for $1.42 billion.
Cnooc said OML 130 was located in Niger Delta region, which is one of the world's most prolific oil and gas basins. OML 130 was a deep-sea block covering an area of about 500 sq miles.
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