Oil India, Indian Oil Said to Have Made Gulfsands Rejected Bid
March 20, 2010, 3:24 PM EDTBy Rakteem Katakey and Chanyaporn Chanjaroen
March 21 (Bloomberg) -- Oil India Ltd. and Indian Oil Corp. jointly made the bid for Gulfsands Petroleum Plc that the U.K. company with assets in Syria and the Gulf of Mexico rejected last week, three people familiar with the matter said.
The unsolicited approach was “wholly inadequate,” Gulfsands said March 19, without giving details. The bid was at 350 pence a share, the Financial Times reported yesterday, or 10 percent above the March 19 closing price. That would value the London-based company at about 400 million pounds ($601 million), the newspaper said. The offer may be increased, it said.
Bobby Morse, an external spokesman for Gulfsands, declined to identify any bidder or pricing. The people familiar with the approach declined to be identified because the discussions between the U.K. company and the two state-owned Indian ones were private.
The Indian government is seeking to buy energy assets abroad to make up for declining production at home and to cater to an economy that is likely to grow more than 8 percent in the fiscal year starting April 1. State-run Oil & Natural Gas Corp. bought Imperial Energy Plc for 1.4 billion pounds last year in its largest acquisition.
Gulfsands owns a 50 percent stake in a block in Syria that is producing about 11,000 barrels a day of crude oil, according to the company’s Web site. It also owns interests in 44 blocks, including 30 producing blocks, off the coast of Texas and Louisiana.
Gulfsands rose 1.8 percent to 318 pence in London trading on March 19, taking the company’s market value to 382.4 million pounds. The stock has advanced 38 percent this year, compared with a 4.4 percent increase in the FTSE 100 Index.
‘Opportunities’
“We are looking at various opportunities around the world,” Oil India Chairman N.M. Borah said by phone today. “We are in various stages of negotiations, and we hope something works out.” He declined to comment on whether the country’s second-largest state-run oil explorer is bidding for Gulfsands.
Brij Mohan Bansal, chairman of Mumbai-based Indian Oil, said today by phone he would “reserve comment” on whether his company, the nation’s second-biggest refiner, is bidding.
Oil India, based in Duliajan in Assam state, has a market value of 267 billion rupees ($5.9 billion). Indian Oil is valued at about $16 billion.
Gulfsands was granted a 25-year production license in January from Syrian authorities to develop the Yousefieh oilfield. Production will start in April, with a target to produce 6,000 barrels a day from the field by 2012, the company said in a statement Jan. 26.
India has ordered ONGC and Oil India to acquire at least one big asset each in the year starting April 1, Oil Secretary S. Sundareshan, the most senior civil servant in the Oil Ministry, said March 18.
Cnooc Ltd., China’s biggest offshore oil explorer, on March 14 agreed to buy a 50 percent stake in Argentine oil producer Bridas Corp. for $3.1 billion as it seeks to add overseas reserves.
In its report yesterday, the Financial Times identified only Indian Oil as a bidder for Gulfsands.
--With reporting by Madelene Pearson in Mumbai. Editors: Dick Schumacher, Nathaniel Espino.
To contact the reporters on this story: Rakteem Katakey in New Delhi at rkatakey@bloomberg.net or; Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net.
To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net.
