India’s flagship overseas oil firm ONGC Videsh has got a new partner in Oil India Ltd to replace a reluctant Indian Oil (IOC) for the potential acquisition of a 50 per cent stake in Tullow Oil Plc’s $3.4 billion oilfield project in Kenya, according to people with knowledge of the matter.
But the OVL-OIL duo now face competition from super-aggressive Chinese energy giant Sinopec, which has entered the fray taking advantage of the delay on the Indian part in finalising the deal.
Originally, ONGC Videsh, the overseas arm of state-owned ONGC, was interested in buying out half of the stakes that Tullow, Africa Oil Corp and TotalEnergies SE held in the Lokichar oilfield in Kenya.
The board of OVL had approved the deal, sources said, adding the firm, however, wanted to bring on board IOC, which too had shown interest. For months, OVL-IOC negotiated the stake in the project. But the transaction couldn’t be completed as IOC started having second thoughts, possibly due to financial strains resulting from losses on fuel sales.