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India – Angola may foil Shell’s bid to sell shares to India

Indo-Asian News Service: India – Angola may foil Shell’s bid to sell shares to India

17-September-2004

India News – New Delhi, India’s attempt to acquire Royal Dutch Shell’s 50 percent stake in an offshore exploration block in Angola may fall through with the African nation likely to exercise its pre-emption rights.

At the same time, given the political ties between the two countries, Angola has agreed to consider India’s request for participation in the exploration, Petroleum Minister Mani Shankar Aiyar said Friday.

“We are likely to get farming-in (participatory) interest through the Angolan state oil company’s share rather than through Shell’s share,” Aiyar said in a teleconference from Vienna, where he is attending a meeting of the Organisation of Petroleum Exporting Countries (OPEC).

Aiyar has been holding talks with his counterparts from various oil exporting countries on the sidelines of the OPEC meet.

During his interactions, Angolan Petroleum Minister Desiderio da Graca Verissimo e Costa confirmed the county’s state-owned oil company Sonalgol would be examining its right of pre-emption in early October to resume Shell’s share of the offshore block.

“Their (Angolan government’s) quarrel is not with India but with Shell for not seeking government permission before agreeing to sell the 50 percent stake (to ONGC Videsh),” Aiyar said.

“We just have to accept that Angola will exercise its right of pre-emption.”

Earlier this year, India’s exploration major ONGC Videsh had struck a deal to acquire Shell’s stake in the offshore exploration block for $600 million but had been awaiting a formal approval from the Angolan government and Shell’s partner in the block, British Petroleum.

The 50-percent stake in the oil-rich block was expected to fetch import dependent India around five million tonnes of crude oil annually, according to petroleum ministry officials.

Given India’s support during Angola’s long freedom struggle, Aiyar said the country’s petroleum minister had agreed to India’s request for future cooperation.

“The Angolan government would consider farming-in India as a co-participant through a subsidiary production sharing arrangement,” said Aiyar.

Indo-Asian News Service

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