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ONGC on the prowl for Tullow; aiming to triple its African production over the next 16 years.

THE WALLSTREET JOURNAL

India’s ONGC Videsh in Deal Talks With U.K.’s Tullow
ONGC’s Director of Exploration Says Tullow is Willing to Sell Assets

By JUSTIN SCHECK and ALEXIS FLYNN
Updated Nov. 4, 2014 2:24 p.m. ET

CAPE TOWN—India’s state-owned oil producer ONGC Videsh has been in deal talks in recent weeks with the U.K.’s Tullow Oil PLC, ONGC’s exploration chief said Tuesday.

Anil Bhandari, ONGC’s director of exploration, said his staff met Tullow executives in London last week, and they will continue their talks in coming days. Mr. Bhandari said Tullow executives told him that “currently, they are not interested” in selling the company, but they are willing to sell assets. Mr. Bhandari said his company is interested in buying shares of Tullow properties in Ghana and elsewhere in Africa.

ONGC has assets across Africa, in countries including Libya, Sudan and Mozambique. Mr. Bhandari said he’s interested in developing both onshore and deepwater fields in Africa. In a speech Tuesday at a Cape Town conference he said that his company is aiming to triple its African production over the next 16 years.

Though once well-known for its knack of finding oil---Tullow was regularly voted “Most Admired Explorer” in a survey run by research firm Wood Mackenzie---the company’s fortunes have declined recently, leaving some executives fearing a takeover, people familiar with the matter said.

Tullow’s share price has fallen 46% this year and by more than two-thirds since early 2012, in part thanks to falling oil prices but also due to the company’s lack of exploration success in recent times. Tullow’s market value Friday was around GBP4.4 billion ($7.0 billion).

Since making huge discoveries in Ghana and Uganda in the decade after 2000, Tullow has struggled to repeat the trick. Its shares dropped sharply last month after the company announced mixed drilling results in Kenya.

Also last month, ratings agency Moody’s downgraded the company’s debt to Ba3, citing its overreliance on Ghana, where its Jubilee field accounts for nearly half the company’s oil production.

http://online.wsj.com/articles/indias-ongc-videsh-has-been-in-deal-talks-with-uks-tullow-1415119910