China National Offshore Oil Corp. may buy Tullow Oil's assets in Bangladesh and Pakistan that the UK company plans to sell as a package deal, a CNOOC source said Thursday.
CNOOC had been eyeing only the Bangladesh assets initially and had held talks with Tullow, he said. But as Tullow later decided it wanted to sell its Bangladesh and Pakistan assets in a package deal, CNOOC will continue its discussions with the company, he added.
Though he admitted that the Pakistan assets might be priced very low, he declined to talk about the price levels under discussion.
Tullow Oil is planning to divest all of its Asian assets, which are located in Bangladesh and Pakistan, to focus on its huge Jubilee discovery offshore Ghana and exploration in South America and Africa.
Australian exploration and production company Santos had looked at buying Tullow's Bangladesh assets but lost interest following the discovery of the Srikail gas field by the Bangladesh Petroleum Exploration and Production Company or Bapex.
The Srikail field, with recoverable gas reserves of 300 Bcf, is located next to Tullow's producing onshore Bangora gas field in Comilla district under block 9, about 100 km southeast of the capital Dhaka. Bapex discovered the field mid-July this year and plans to start production this month.
Tullow has a 30% stake in the Bangora gas field, which has a gross output of around 100,000 Mcf/d, or about 17,000 boe/d. Tullow's share from the field is about 5,100 boe/d. The concern is that Bangora's gas output and reserves could fall sharply with the start of production from Srikail, a Santos source said previously.
Tullow was also awarded the shallow offshore gas block SS-08-05 in the February 2008 bidding round. India claims that a major portion of the block lies in its territory and the case is before the Permanent Court of Arbitration at the Hague.
In Pakistan , Tullow has exploration, development and production interests across seven licenses spanning 13,171 sq km (4215 sq miles). Tullow's sales revenue from Asia totaled $20.8 million in 2011, while its global sales revenue totaled $2.3 billion.
