fyi

Chinese big three, ONGC seek Marathon Angola stake

By Tom Miles of Reuters

HONG KONG -- US energy company Marathon Oil Corp is selling a 20 per cent stake in an Angolan oil field that could fetch almost $US2 billion ($A2.27 billion), attracting bids from China's top three oil firms, India's ONGC and Brazil's Petrobras, sources close to the matter said.

Marathon is selling two-thirds of its 30 per cent holding in Angola's offshore Block 32 as part of an asset sale program the company hopes will raise $US2 billion to $US4 billion within a year.

At the end of 2007, there had been 12 announced discoveries on Block 32, with total resources of about 1.5 billion barrels of oil equivalent, according to Exxon Mobil Corp, one of Marathon's partners on the block.

The value of the asset was boosted last month when Angola approved development of neighbouring Block 31, paving the way for oil companies to book potentially huge reserves there.

Marathon has said it expects to get government permission for the development of Block 32 about 12 to 18 months after Block 31. The company holds a 10 per cent stake in Block 31.

The remaining interests in Block 32 are held by operator Total (30 per cent), Sonangol (20 per cent), Exxon Mobil (15 per cent) and Petrogal (5 per cent).

The ultra-deepwater offshore field is of interest to China, which covets deepwater drilling experience for development of its own offshore blocks.

Sources familiar with the bidding process said giant Chinese refiner Sinopec had teamed up with China's offshore specialist CNOOC to bid. Unusually, top Chinese oil producer China National Petroleum Corp or CNPC had also made a separate bid.

One energy banker not directly involved in the process said he expected India's Oil & Natural Gas Corp or ONGC to be a very active bidder, since it had bid aggressively for the last Angolan offshore block that was available.

Brazilian deepwater specialist Petrobras was also bidding, while one energy banker said he expected the field to be of interest to US and European majors such as ENI SpA of Italy.

Bidding in the sale process, run by energy consultants Harrison Lovegrove, has now finished and moved to the negotiation stage, which could end within days, with the final price likely to be close to $US2 billion, a source familiar with the matter said.

A Marathon spokeswoman said the company does not comment on market rumours or speculation.

It said in January that it planned to sell off mature or nonstrategic assets after announcing a 54 per cent increase in its capital spending budget for 2008. The asset review would increase its financial flexibility, the company said.

The company, which has said it is considering splitting its exploration and production business from its refining operations, has already sold off North Sea assets as part of the review