ONGC of India to Buy Imperial Energy of Russia
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Thursday, 28 August 2008 |
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ONGC, said it had agreed a $2.6 billion takeover of Imperial Energy
this week in a bid to secure supplies for India's growing economy.
Sinopec and Korea National Oil Company had also been linked as
interested parties.
The takeover will require the approval of the Russian
authorities. Several sources said high-level
talks had taken place between the Indian and Russian governments.
However it remains to be seen if the Russian government will allow ONGC
to 100% ownership with the increased control of the Russian oil and has
sector witnessed in recent years.
"We initiated parallel discussions with the Russian government and will
give some stake to a Russian firm if we get Imperial, most likely it
will be Rosneft," an ONGC Videsh source said.
Such a move would follow a recent pattern of the state-backed giants
winning majority stakes in big, formerly privatised energy assets.
The drop in the price ONGC is willing to pay reflects the drop in the
oil price to around $114/barrel from a July 11 peak above $147/barrel,
the deteriorating relationship between Russia and other countries
following its invasion of Georgia and the results of due diligence, the
sources said.
Imperial produced 10,000 barrels of oil equivalent per day at the end
of 2007 but plans to raise this to 25,000 by the end of 2008.
Imperial founder Peter Levine should net about 100 million pounds from
the sale, according to Reuters data.
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