ONGC may buy stakes in BHP Billiton blocks

MUMBAI: State-owned ONGC is likely to buy stakes in 9 exploration blocks that BHP Billiton decided to surrender last month. This move is seen as the government’s desperate attempt to woo Australia’s mining giant back into India ahead of the next round of NELP bidding in January 2014 and send a positive signal to international investors.

"We will sit across the table and discuss the possibilities. Transactions, if any, will be purely on commercial terms," ONGC chairman Sudhir Vasudeva told TOI without elaborating on the size of the stakes or the deal size. This comes after oil minister Veerappa Moily at an investor’s meeting in Mumbai on Monday said that "BHP Billiton is willing to continue if ONGC is willing to look into some issues".

Over half-a-dozen international firms have exited exploration activities in India after inordinate delay in getting government approvals. The latest being the decision of BHP Billiton, which surrendered oil blocks with potential reserves of 10 billion barrels of oil equivalent.

"The decision to relinquish the blocks was the result of an exploration portfolio review and the inability to carry out exploration work in these blocks," a BHP Billiton statement said last month.

"It seems like ONGC has been asked by the government to buy a stake in its blocks to derisk the Aussie mining giant. With ONGC on board, BHP will be able to secure the necessary approvals easily," said an analyst.

BHP holds 26 per cent interest in the six blocks awarded during NELP-7 and 100 per cent in the three blocks awarded during NELP-8.