Petrobras looking to exit KG-DWN-98/2 in which it holds 15% interest - ONGC (65%), StatOilHydro (10%) and Cairn India (10%).
A deal on the block would be positive as it would provide some valuation pointer to the block. Also with Shell reportedly offering Floating LNG technology for the block, this could lead to a faster development of the discovery.
If it were valued at US$5/BOE (which is in-line with value for other deepwater gas blocks in East Coast India) and 60% recovery, the value of the 2-7TCF
certified reserves would be US$1-3.5bn. Impact on Cairn market cap for its 10% stake would be 1-3%; Impact on ONGC market cap for its 65% stake would be 1-4%. However clarity on reserves and potentially early monetization should be positive for ONGC and Cairn.
