ONGC eyes Angolan assets of Exxon and Total

India’s largest oil group is considering acquiring ExxonMobil’s and Total’s oil assets in Angola, in the latest effort by the state-run group to secure overseas resources to help the country achieve its double-digit growth aspirations.

R.S. Sharma, chairman of Oil and Natural Gas Corp, told the Financial Times on Monday that he had met members of the Angolan government in New Delhi to discuss a number of opportunities, including buying the assets of the US and French oil majors. However, the Indian executive stressed that talks were at a very early stage and he did not specify how much ONGC would invest.

José Botelho de Vasconcelos, Angola’s oil minister, said Exxon and Total were planning to exit the country’s Block 31 oilfield and he added that the Angolan state-run Sonangol oil group was looking for new partners.

India’s growing dependence on energy imports has led the government to urge state-run groups to make at least one overseas acquisition this year, a move that is forcing Indian groups to join China in considering investment opportunities in countries such as Sudan and Angola.

However, in spite of the government’s push for more foreign deals, none of the big Indian state-run groups has been able to seal a deal in the past 18 months as they suffer competition from their financially stronger Chinese rivals.

“The competition from Chinese giants makes life for Indian companies much harder,” said an oil and gas analyst. “If the government wants state-run companies to buy assets, they need to give the oil and gas groups greater freedom to operate and compete with the Chinese.”

The last big deal made by a state-run group was ONGC’s acquisition of Imperial Energy, a London-listed company with most of its assets in Russia, for $2.1bn nearly two years ago.

This year, ONGC has been in talks to buy energy assets in Vietnam and Russia, but failed to reach an agreement on either front. Meanwhile, state-owned Oil India and Indian Oil Corp made a joint $642m take­over bid for Gulfsands Petroleum, which the Syria-focused oil explorer rejected.

“India desperately needs more oil and gas to help the country boost its growth and build the roads and infrastructure that the nation badly needs,” said Anjan Roy, an oil expert at the Federation of Indian Chambers of Commerce and Industry.

“Indian companies are trying to buy new assets and develop new ones in India but, at the moment, the country isn’t meeting its energy requirement targets.”