News Article by Dow Jones posted on April 26, 2002 at 09:56:42: EST (-5 GMT)
India's ONGC Says In Talks To Buy Talisman's Sudan Stake
By Michael Wang
LONDON, Apr 26, 2002 (Dow Jones) -- India's state-owned Oil and Natural Gas Corp. (P.ONG) Friday confirmed that it's in negotiations with Canadian upstream company Talisman Energy Inc. (TLM) to acquire its 25% stake in the politically controversial Greater Nile oil project in Sudan .
"Talks are taking place, that's all I can say," said Joeman Thomas, a general manager in ONGC's offshore division, in a telephone interview from New Delhi.
He declined to comment any further, referring requests for more information to superiors, who were locked in board meetings.
Thomas' comments appear to confirm a report in the U.K.'s Upstream newspaper that negotiations had reached "a crucial stage." The newspaper based its article on unnamed sources.
News of Talisman's discussions to offload its Sudanese oil and natural gas interests is bound to spark a run-up in the Canadian company's share price, which has stubbornly traded at a discount to other mid-tier operators because of its Khartoum connection.
Last October, when Dow Jones Newswires revealed that negotiations were taking place with Swedish oil junior Lundin Petroleum AB (S.LUP), Talisman's stock jumped 6%. Lundin eventually abandoned the talks, saying the price-tag for the Sudanese stake was out of reach.
Current discussions with ONGC are reportedly focused on a price of $650 million.
A London-based analyst said he is giving more credibility to these discussions than previous buyout reports. But he warned that any conclusion could still be months away as Indian operators tend to move relatively slowly in completing transactions.
On the table is Talisman's 25% interest and operatorship in the Greater Nile Petroleum Operating Co., a 225,000-barrel-a-day oil joint venture in southern Sudan - the flashpoint of a 19-year civil war.
The deposit is estimated to contain recoverable reserves of between 660 million and 1.2 billion barrels.
Other partners in the upstream project include Malaysia's Petroliam Nasional Berhad (P.PET) (30%), China National Petroleum Co. (40%) and Sudanese state oil company, Sudapet (5%).
Talisman has been working for sometime to offload the asset and escape the negative publicity of maintaining an investment in a country branded a sponsor of international terror by the U.S. State Department. At one point, the Calgary-based company faced being stripped of its New York Stock Exchange listing by U.S. Congressional legislation that aimed to outlaw companies doing business in Sudan , but the edict was shelved last year.
However, Talisman's lawyers have been busy for months fending off lawsuits alleging corporate complicity with Khartoum's armed campaign to clear indigenous people from oil-rich areas in southern Sudan .
Talisman has consistently denied such charges.
Oil provides about $400 million to $500 million in revenue to Khartoum each year, and much of that money has gone to buy new weapons for government forces.
Last month, a six-month cease-fire in the Nuba region in the south took effect, following brokering efforts by special envoy John Danforth, a former U.S. senator, appointed by the Bush Administration last September.
Talisman's shares closed Thursday in New York up 28 cents, or 0.7%, at $41.63. |
