IOC-OIL to buy stake in Congo oilfield for $1.5 bn

“Burren Energy is opposed to the sale. It is likely to exercise its pre-emption right to stop the sale and instead bring in IOC,” an industry source said. The British firm has time till the end of this month to exercise its pre-emption right.

IOC and its partner Oil India Ltd are in advanced stage of discussion with Burren Energy for possible takeover of Maurel & Prom’s interest in Congo.

“Burren Energy wants operatorship of the fields in Congo. By exercising its pre-emption right, it will first acquire Maurel & Prom’s interest in the fields and through a back-to-back agreement sell most of it to IOC-OIL combine,” he said.

The IOC-OIL combine had been interested in Maurel & Prom’s Congo assets and their internal valuation had put the asset value at about $1.5 billion, $100 million more than what Eni is paying.

Maurel & Prom had last month announced sale of its 48.6 per cent interest in M’Boundi oil field and 66 per cent in Kouakouala-A oilfield to Eni. Besides, it was selling 50 per cent in Kouakouala B, C, D exploration blocks and 50 per cent Kouilou exploration permit.

Burren Energy has 31.5 per cent interest in M’Boundi field and 25 per cent interest in Kouakouala. If the acquisition goes through, IOC-OIL will get 17,000 barrels of oil per day from M’Boundi field in 2007. This will increase to 28,000 barrels per day in 2010, the source said.

The giant field holds 1.4 billion barrels of in-place oil reserves and produces high-quality oil.