Videocon Industries, the oil-to-consumer durables company, has joined the race for the acquisition of the London-based Burren Energy, which recently rejected several approaches including one worth $3.5 billion (Rs 14,000 crore) from the Italian major ENI.
Videocon has submitted an expression of interest for Burren, which produces oil in Congo and Turkmenistan.
"The expression of interest is in line with the Videocon group's plan to acquire oil assets across the globe to bring in the scarce commodity to oil-starved India," a senior official of Videocon Industries said.
Burren last week rejected a £12 per share bid by ENI saying it had failed to "reflect the fundamental and strategic value of its assets".
Analysts believe Burren could be worth around £14 a share. This means the successful acquisition would cost the buyer around $4 billion (Rs 16,000 crore).
Analysts said Videocon would face stiff competition from the likes of steel magnate LN Mittal and Korea National Oil Corporation, which have also reportedly shown interest in Burren.
Videocon sources said they are aware of the competition and high valuations of the oil companies when global crude oil prices are flirting with the $100 per barrel mark.
"We are interested in the assets. We will go ahead if we find the valuation of the foreign company attractive. All we can say now is that our outlook for crude prices is bullish," a Videocon source said.
Investment bankers said it would take at least six months for Burren to be sold as the divestment process in the preliminary stages.
Analysts said another Indian company showed interest in Burren. The stock market is abuzz with speculation that Essar Oil might be interested in Burren, which the Essar group denied. Sources at Indian Oil Corporation said they were not considering bidding for Burren as it was too highly priced.
"We will wait and see if crude oil prices fall and the valuation of Burren decreases," a senior IOC official said.
Videocon already has exploration and production assets in Oman, Australia, Canada and the Timor Sea.
Videocon recently bought the Brazilian assets of Canadian gas producer EnCana Corporation for around $165 million as part of a consortium with Bharat Petro Resources Ltd, the exploration arm of Bharat Petroleum.
Analysts said the company is close to discovering oil in the foreign blocks within a couple of months.
Burren is listed on the London Stock Exchange. It currently produces over 35,000 barrels of oil per day primarily from the M'boundi oil field in Congo, one of Africa's biggest onshore fields.
The company also has a minority holding in Hindustan Oil Exploration Company, which is listed on the stock exchanges.
