India's Oil and Natural Gas Corporation and China National Petroleum Corporation have jointly won a bid to acquire 37 per cent of Petro-Canada's stake in Syrian oilfields for Euro 484 million ($573 million).
The two firms, run by their respective governments and often competing against each other in the race for acquiring energy assets, will equally share equity in the venture.
The proposal will now be put up with the Syrian government for its approval. This is the first joint bid by an Indian and a Chinese oil company. In all, eight firms were in the race for Petro-Canada's stake in the oilfields.
"The Syrian acquisition is a major breakthrough for us. We are very excited because this is the first time an Indian company has acquired an oil property along with a Chinese company," ONGC Chairman Subir Raha said, adding that the company would explore the possibilities of more such collaborations with the Chinese in the future.
ONGC and CNPC are also stakeholders in an oilfield in Sudan, though they did not bid for it jointly.
ONGC's overseas arm ONGC Videsh Ltd had competed with Chinese firms for oil properties in Central Asia, West Africa and Latin America in the recent past. They took each other head on for buying Canadian firm Petrokazakhstan, which had most of its operations in Kazakhstan. They were also pitched against each other for Encana's Ecuador assets.
But the Indian government is keen to avoid cut-throat competition with Chinese oil firms.
"It is an important milestone. We have been working on this for quite some time. Instead of competing wherever possible, we should work together," Indian Petroleum Secretary SC Tripathi said, adding, "We will bid together whenever it is feasible."
The acquisition comes shortly before Indian Petroleum Minister Mani Shankar Aiyar's visit to Beijing in January. Aiyar is expected to be in China for about a week starting January 10 to look for more collaborations between the two countries in the oil and gas sector.
Both China and India have been actively scouting for oil blocks in various parts of the world to meet their growing demand for energy.
