To pay $425 m each for acquisition

Our Bureau

New Delhi, Sept. 21

In a first acquisition jointly made, Oil and Natural Corporation (ONGC) in equal partnership with China's Sinopec has acquired Columbian oil firm Omimex de Columbia for $850 million. According to a statement issued here, ONGC said, "A 50:50 joint venture - comprising a subsidiary of ONGC Videsh Ltd and a subsidiary of Sinopec International Petroleum Exploration and Production Corporation (SIPC) - has acquired Omimex de Colombia Ltd (Omimex), from Texas-based Omimex Resources, Inc."

Sources told

Business Line

that the name of OVL's subsidiary would be ONGC Mansarovar. OVL, the overseas arm of ONGC, and a subsidiary of Sinopec will pay $425 million each for acquiring Omimex, sources added. OVL was advised by UBS Investment Bank, SIPC by Citigroup Global Markets Ltd and Omimex Resources, Inc by Scotia Waterous for the acquisition.

Omimex has oil and gas operations exclusively in Colombia, which include onshore production and exploration areas with gross proved reserves of more than 300 million barrels of oil and current production at approximately 20,000 barrels of oil per day.

Omimex's assets

Omimex's assets constitute a 100 per cent interest in the light oil Velasquez fee mineral property and a 50 per cent interest in the Nare and Cocorna association contracts where the Colombian national oil company Ecopetrol S.A. holds the remaining 50 per cent.

Omimex also owns 100 per cent of the Velasquez-Galan pipeline, which runs 189 km from the Velasquez property to Ecopetrol's Barrancabermeja refinery.

SIPC is a wholly-owned subsidiary of China Petrochemical Corporation (`Sinopec Group'). Sinopec Group is China's largest producer and supplier of oil products and major petrochemical products.

(This article was published in the Business Line print edition dated September 22, 2006)
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