Scottish explorer Cairn Energy Plc rejected state-owned Oil and Natural Gas Corp's $200 million bid to acquire its oil and gas properties on east and west coasts of India.
"Cairn did not find ONGC's non-binding bid up to its expectations," industry sources said.
However, Cairn has not closed the chapter with ONGC and was likely to continue negotiations for a higher price in the next round.
The British firm has already sent fillers to Reliance Industries and state gas firm GAIL India Ltd for sale of its interest in the Krishna Godavari and Cambay basin blocks and the 50,000 barrel per day Ravva oil and gas field.
Sources said country's largest refiner Indian Oil Corp too was interested in certain Cairn assets but did not open a direct channel fearing ONGC might dump it from future bidding for oil and gas block offered under New Exploration Licensing Policy.
IOC, which has won over a dozen blocks in consortium with ONGC during the previous three rounds of NELP, had reached an understanding with the exploration firm to take minority interest in oil properties after acquisition by ONGC, they said.
ONGC had bid for Cairn's Krishna-Godavari basin deepwater block KG-DWN-98/2, shallow water block KG-OS/6 and CB/OS-2 block in Cambay Basin. It, however, did not bid for Cairn's 22.5 per cent stake in Ravva field.
The company's overseas arm ONGC Videsh Ltd was looking at acquiring British oil and gas major's stake in Sangu gas field in Bangladesh.
While Cairn is seeking to divest its stake in all of its properties, including Ravva field, it is not selling the
RJ-ON-90/1 block in Rajasthan - the site of recent 20 million tonnes of oil find and the previous Saraswati discovery that is estimated to have 14 million tonnes of inplace oil reserves.
ONGC had made the bid for Cairn's assets in India based on the recommendation of technical consultant D&M, legal consultant Dentol Wilde Sapate and financial consultant Morgan Stanley, sources said.
Cairn has made five hydrocarbon discoveries in the CB/OS-2 Block since 2000 - Lakshmi gas, Lakshmi oil, Gauri (gas and oil), Ambe (gas and oil) and Parvati (oil). The Lakshmi gas has already been put to production and the company is selling 2.1 million standard cubic meters per day to Gujarat Powergen Energy Corporation and 1.3 mmscmd to Gujarat Gas Company Ltd.
Sources said Gauri gas was likely by first quarter of 2004.
Cairn has struck one trillion cubic feet of gas reserves in three finds in the KG-DWN-98/2 block off the Andhra coast.
