UPDATE 1-India state oil firms persist on Canada oil sands bid

Tue Dec 11, 2012 4:18pm EST
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* Consortium says still in running for oil sands assets

* Expects that new Canadian rules will not rule out deal

* No time frame for ConocoPhillips decision

By Prashant Mehra and Nidhi Verma

MUMBAI/NEW DELHI, Dec 11 (Reuters) - India's state oil companies intend to press ahead with plans to buy stakes in Canada's oil sands and believe they will not run afoul of tougher Canadian rules on foreign ownership of the sector.

A consortium of Oil and Natural Gas Corp, Oil India Ltd and refiner Indian Oil Corp is among three bidders short listed to buy stakes in Canadian oil sands owned by ConocoPhillips. The assets could be worth up to $5 billion.

"We are very much in race for Conoco's assets," an official at one of the Indian consortium partners told Reuters, declining to be identified. The consortium submitted its bid in July.

"Our deal will not be affected as our understanding of the new rule is that JV (joint-venture) stake sale or non-controlling stake sale are welcomed by Canada. However complete takeover will be approved as an exception," he added.

On Friday, Canada approved a $15.1 billion bid by China's CNOOC for Nexen and a $5.3 billion takeover of Progress Energy by Malaysia's Petronas, but shut the door on similar deals in the future.   Continued...