Singapore: India's Oil and Natural Gas (ONGC) has won the auction of a Nigerian offshore oilfield with an offer of around $2 billion, say sources.
The stake in the yet-to-be-developed Akpo field was put up for sale earlier this year by Nigerian firm South Atlantic Petroleum, which is controlled by former Nigerian Defence Minister Theophilus Danjuma, anonymous sources have told Reuters.
ONGC's Indian fields are in decline, and the company is searching the globe for oil and gas to supply India's booming economy.
The deepwater field Akpo, operated by French oil company Total SA, needs billions of dollars of investment for development.
Total said in May that Akpo would come onstream in late 2008 and was forecast to reach peak production of 225,000 barrels of oil equivalent per day.
The stake was initially valued by investment bankers at around $1 billion, but buyers put in higher bids after obtaining detailed data, the source said.
The state-run Indian energy giant was beaten by China's state oil firms in the $4.2 billion takeover battle of Canadian company PetroKazakhstan and the $1.4 billion acquisition of oil fields in Ecuador sold by North American producer EnCana.
Sources at ONGC and the Indian government say the company's overseas arm, ONGC Videsh, was behind the bid. The unit has invested in more than a dozen countries including Russia, Sudan, Burma and Cuba.
Shares in ONGC, India's most valuable company with a market value of about $32 billion, were down 1.15 per cent at Rs1,031.10 yesterday. The total investment by the winning bidder would reach several billions of dollars if future spending on field development is counted.
It was not immediately clear who the other bidders were, although there was talk that several Chinese state oil companies had looked at the asset.
Nigeria is Africa's biggest oil producer and the world's eighth-largest oil exporter, producing 2.4 million barrels per day.
Last month, Nigeria signed a deal with ONGC Mittal Energy, a partnership between ONGC and Mittal Steel the world's largest steel maker, to give oil exploration rights in return for up to $6 billion in infrastructure investment.
Total said in May it had been authorised by Nigerian National Petroleum to begin developing the Akpo field on the Oil Mining Licence (OML) 130.
Total holds a 24 per cent interest in the OML 130. Other partners are South Atlantic, Nigerian National and Petrobras
The Akpo field was discovered in 2000, and is located 200 kilometres (120 miles) offshore in water depths ranging from 1,100 to 1,700 metres.