Asia Pulse: ANGOLA BLOCKS INDIAN DEAL TO BUY SHELL STAKE IN OIL FIELD (ShellNews.net)

Sep 20, 2004

NEW DELHI, Sept 20 Asia Pulse - ONGC Videsh Ltd's attempt to buy oil major Shell's stake in a 10 million tonnes per annum oil field in Angola is unlikely to go through with Luanda deciding to block the deal.

Petroleum Minister Mani Shankar Aiyar met Angolan Minister for Petroleum Desiderio da Graca Verissimo e Costa on the sidelines of an OPEC conference in Vienna, but could only extract an assurance that Angola would consider farming-in OVL after Shell's 50 per cent stake in the block is taken over by Sonangol.

"Our approach earlier was to get Sonangol to waive its pre-emption right. But we now understand that Angolan firm will go ahead and exercise its first right to buy Shell stake next month," Aiyar said in a teleconference from Vienna.

In April, OVL cut a deal with Royal/Dutch Shell to buy the supermajor's 50 per cent stake in the offshore Block 18 for US $623 million but Angolan state oil company Sonangol blocked the move by exercising its pre-emption right.

The handover of Shell's stake to OVL cannot go through unless the other partners in the field - British Petroleum (BP) and the Angolan government concessionaire Sonangol - give up their right of first refusal in favour of OVL. BP has already given its waiver but a go-ahead has not yet come from Sonangol.

"The Angolan Minister informed me they have nothing against India...but Shell should have first informed Luanda before deciding to exit the country," Aiyar said adding he had the assurance of the Minister that Sonangol would consider giving OVL some share from the stake it would takeover from Shell.