Mumbai, Oct 02: State-run Oil and Natural Gas Corporation has signed heads of agreement with Scottish explorer Cairn Energy PLC's stake in two oil and gas blocks for US dollars 135 million and the formation of a strategic alliance for future opportunities. As per the agreement, ONGC will pick cairn's 90 per cent stake in deep water exploration block KG-DWN-90/2 in Krishna Godavari basin and will assume operatorship under the terms of transfer agreed between the two, ONGC said in a release here today.
The "farm-out" by Cairn to ONGC of a 15 per cent exploration interest in block CB/OS-2 and a 10 per centy interest in Lakshmi and Gauri development areas in Cambay basin would be effective January one, 2003, the release added.
The "farm-in" interest by ONGC to Cairn of a 30 per cent interest in each block GV-ONN-97/1 onshore northern India and CB-ONN-2001/1 onshore Gujarat western India would also come into effect since yesterday.
ONGC will pay to Cairn a cash consideration of USD 135 million for the "farm-out" interest and it would be adjusted to reflect net working capital movements between the respective agreements, it said.
Cairn will pay ONGC a cash consideration equivalent to economic monetary value of the blocks assessed by the state owned company at the time of bidding for its "farm-in" participative interest in two ONGC blocks to be evaluated by the Scottish company.
Bureau Report