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

"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.

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.

The CNPC-PetroKazakhstan deal would give CNPC access to PetroKazakhstan's 150,000 barrels per day of production -- a small fraction of China's 6 million barrels per day of consumption but a step nonetheless for the world's second-largest oil-consuming nation and its fastest-growing major economy.

It also comes just weeks after compatriot CNOOC Ltd. (CEO) was foiled in its bid to acquire the American producer Unocal (UCL) for $18.5 billion.

"It's a very high price but this is a strategic investment. Finally, it's reserves that you can bring to China," said Stephen O'Sullivan, oil analyst at United Financial Group in Moscow.

CNOOC's failure to acquire Unocal, in the face of unexpectedly heavy political backlash in a Washington concerned over America's own future oil needs, was widely seen as only a temporary setback to China's national oil plans.

Indeed, industry sources familiar with the strategy of Chinese state oil companies said they may have put more overseas listed energy concerns on their radar screen, such as Britain's BG, some Canadian oil sand producers, and possibly exploration and production companies listed in Australia or London.