Our Bureau

New Delhi, Feb. 23

INDIAN Oil Corporation, the country's largest oil refiner, is negotiating to snap up the French exploration company Maurel & Prom (M&P).

"We are in talks since October last year with Maurel & Prom to acquire the company and the negotiations are continuing," an IOC official said without divulging details.

IOC is understood to have offered around $1.2 billion to acquire the exploration firm, which has producing assets in Congo, Vietnam and Cuba with reserves of 300 million barrels of oil equivalent proven and probable and about 270 million barrels of possible oil equivalent. The negotiations have hit a patch with Maurel & Prom seeking a premium over the IOC price. The domestic oil refining and marketing major is also looking at buying the Paris-based company's African assets amid signals that M&P may no longer favour a full sale.

M&P has also attracted a competing bid from a leading Chinese energy company, it is reported.

If the deal goes through, it will fulfil the company's vision statement to become a fully integrated transnational energy major. "Currently, we are a down-stream major. If we have to become a fully integrated company, we need to have a presence in exploration and production as well," he noted.

"For this purpose, the company's board had some time back approved an investment of up to $2 billion for acquiring a mid-sized exploration and production company," he said.

Last week, IOC in partnership with Oil India Ltd had won an oil equity block in Sirte, Libya. "This is the first oil equity block that IOC has bagged abroad in association with OIL as per the memorandum of understanding signed between the two companies to bid jointly for oil blocks outside India," the official said.

So far, IOC had been involved in service contracts, including 12 blocks with ONGC under the New Exploration Licensing Policy and the Farse block in Iran in partnership with ONGC Videsh Ltd, the overseas arm of ONGC.

(This article was published in the Business Line print edition dated February 24, 2005)
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