Reuters NEW DELHI: Indian state-run explorer Oil and Natural Gas Corp. (ONGC) is firming up a proposal to buy up to 33 percent in an Egyptian deepwater gas block from operator Royal Dutch Shell, sources said on Thursday. Talks are at an advanced stage. Very soon a high-level government panel will take a decision whether to allow ONGC to go ahead with the offer or not, a source involved in the planned deal said. The value of the possible transaction was not known. The deal for a stake in Shell s North East Mediterranean Deepwater block is not being opened to bidding, and no swap arrangement between the two firms is involved, an industry source said. Shell has announced the block, in which it holds 84 percent, has probable reserves of 15 trillion cubic feet, according to a US Department of Energy web site. The block holds initial in-place reserves of more than 1 tcf with sizeable upside , the industry source said. Malaysian state oil and gas company Petronas owns the remaining 16 percent in the deepwater concession, which was awarded in 1999. ONGC Videsh Ltd., the overseas investment arm of ONGC, has to obtain government permission for any deal that exceeds either $75 million or three billion rupees, whichever is the lower figure. ONGC Videsh has been asked to target production of 6.34 million tons of oil and 1.65 billion cubic meters of gas in the 2007/8 fiscal, the government said on Thursday. To secure more equity oil, the company is pursuing oil and gas assets in Sudan, Iran, Iraq, Nigeria, Algeria, Egypt, Syria, Libya, Russia, Venezuela, Kazakhstan, Azerbaijan. A deal would be ONGC s second overseas tie-up with Shell and would land the company its second Egyptian asset. Last April, ONGC Videsh acquired a 15 percent stake in Brazil s BC-10 block after Shell exercised its pre-emption option to buy an additional 30 percent from Petrobras and transferred half in favour of the Indian company. ONGC Videsh and its partner IPR Red Sea Inc. recently made a significant new oil find in the Gulf of Suez.
