updated 8/23/2005 8:57:26 AM ET 2005-08-23T12:57:26

India's biggest state-run oil company, Oil and Natural Gas Corp., may make a counteroffer for PetroKazakhstan Inc., the chief executive of the Indian company said a day after it was outbid by a unit of China National Petroleum Corp.

"We lost very narrowly," ONGC Chairman Subir Raha told The Associated Press. "We are in touch with our bankers. We are assessing options," Raha said.

But another ONGC official, speaking on condition of anonymity because of the sensitive nature of the issue, said there was little chance that PetroKazakhstan, a Canada-based oil producer, would consider further offers.

In most such cases, the seller decides whether to call for a counterbid, but in some cases rival bidders have made counteroffers unilaterally.

ONGC, which bid through a joint venture between its overseas arm, ONGC Videsh Ltd., and Netherlands-based Mittal Steel Co., reportedly put in a $3.9 billion offer — the highest in the first round. But it was outbid by the international wing of China National Petroleum Corp., which offered $4.2 billion.

Following the news, ONGC shares on the Bombay Stock Exchange fell 2.3 percent to 967 rupees ($22) at the close of trading Tuesday.

ONGC's failure to secure the purchase of PetroKazakhstan Inc. — which drills for oil in the Central Asian nation of Kazakhstan — was the latest in a series of failed attempts by Indian companies to secure additional energy supplies.

Last month, ONGC Videsh and the Mittal group announced a joint venture to bid for stakes in overseas oil and gas fields.

Some 22 countries were shortlisted in their search for energy-related business opportunities, mostly in Central Asia, Africa and Central America.

ONGC's Raha denied the PetroKazakhstan deal would have an adverse affect on his company's overseas plans or its new alliance with the Mittal group.

"We cannot sit in judgment on any tie-up based on the outcome of a particular deal," he said. "There will be no impact" on ONGC's plans.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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