India's Oil and Natural Gas Corp is still hoping to clinch the deal for takeover of PetroKazakhstan, with senior officials dashing-off to Russia to get Lukoil to stop the company's sale to China's CNPC.
Lukoil, Russia's largest oil producer, is a partner of Petrokazakhstan and has the right to block CNPC's deal, which ONGC contends was struck through an 'unfair' bidding process.
The Indian government has, however, stayed out of the PetroKazakhstan affair till now and refused to use diplomatic channels for ONGC.
"We are not in it. It is a commercial deal between ONGC and PetroKazakhstan and ONGC is looking at ways to re-enter (the race)," a top official in the petroleum ministry said.
Top official of ONGC Videsh Ltd, the overseas arm of ONGC, rushed to Moscow yesterday to court Lukoil.
ONGC's contention is that PetroKazakhstan's acceptance of China National Petroleum Corp's $4.18-billion takeover offer was unfair as the Canadian firm's financial advisor Goldman Sach had, only on August 19, informed OVL that its bid was the best.
ONGC had bid for PetroKazakhstan jointly with world's largest steel maker Mittal group.
Goldman Sach, however, sought clarifications on two conditionalities put by the Indian consortia, the official said, adding that ONGC-Mittal combine were to submit a letter on August 22 withdrawing the conditions but their bid of $3.9-$4 billion was shown to the Chinese company on Sunday (August 21), following which it improved its previous offer to outbid ONGC.
Analysts, however, expressed surprise at the Indian government not intervening in the tender norm violation even though it was aware that Beijing put all its weight behind CNPC to get PetroKazakhstan.
The Oil Ministry official, however, said the government was willing to do "whatever was within its right" to help ONGC.
"Let them (ONGC) look for avenues first and tell us what they need. We will respond to their needs."
An industry official said ONGC-Mittal combine had put conditionalities in its bid as PetroKazakhstan faced up to 200 million dollar of tax liabilities and wanted a clarity on the liability it might inherit if it succeeded in buying PetroKazakhstan.
The Indians are also exploring if Kazakhstan has pre-emptive right on sale of PetroKazakhstan and if it can be used in its favour, he said.
PetroKazakhstan accounts for about 12 per cent of oil production in Kazakhstan and is the third largest oil producer in that country. It owns 500 million barrels of reserves, 150,000 barrels a day of crude output and a refinery.
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