ONGC should make counter bid for CAIRN india assets

Anil Agarwal of Vedanta Resources has made a bid of Rs 44160 cr for 50% stake in Cairn india and is required to make an open offer for 20% stake which will be valued at Rs 15500. This make CAIRN India's valuation Rs 82190 crore

CAIRN India has proven oil reserve of 4 Billion BOE or 560 MTOE as against 207 MTOE owned by ONGC
at 70 per cent interest cairn india still has 390 MTOE of reserves is 1.88 times ONGC 2008-09 proven reserves

AT risk reserve level the total reserve estimated at 6.5 Billion BOE or 910 MTOE which at 70 % is 640 MTOE is 3.09 times ONGC 2008-09 proven reserves

Now question arise whether ONGC valued 2.9 lakh crore will counter bid for 390 MTOE proven reserves 50% interest investing Rs 44160 crore which makes an per 226 crore per MTOE (at full value ie., Rs 88320 cr)

It may be remebered that ONGC valution at 207 MTOE is 2.1 lakh crore (after adjusting for other assests) which make it 1014 cr per MTOE

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I have taken care while collecting data from AR of ONGC for 2008-09, CAIRN India 2009-10 and while converting BOE to MTOE

MY understanding is that CAIRN has interest of 70 % proven reserve of only out of 6.5 BillionBOE at risked level and of 70% 2P proven reserve of 4.0 billion BOE which make its interest at 640 MTOE and 390 MTOE respectively.
If it is otherwise the valuation will only improve and the valuation at 44160 cr for 560 MTOE will be 160 cr for MTOE (at full value)

I personaly think that ONGC should make an assesment of the proven reserve claimed by CAIRN India and if the same is found to be correct then make a counter bid in nation's energy interest. Spending an amount of 44160 crore for 50 % stake for controlling oil resources which is said to meet a quarter of energy requirment will not be worthless in times when energy prices go up.

All interested indians may kindly contact

S.K Srivastava
Director General of Hydro carbon
Phone No : 91-120-4029401, 91-120-4029402
Fax:91-120-4029403
E-Mail: dg@dghindia.org

Mr. N K Sinha,
Company Secretary,
Oil and Natural Gas Corporation Ltd.
8th Floor Jeevan Bharti Building, Tower II
124, Indira Chowk,
New Delhi - 110 001.
Tel No : 91 11 23323201
Fax No : 91 11 23311326
secretariat@ongc.co.in

or may mail to OIL PSU of india so they can make a counter offer

hpclinvestors@hpcl.co.in
okhdevs@iocl.co.in
ssc@bharatpetroleum.in
oilindia@oilindia.in
investorqueries@gail.co.in