| Srinivasan: Looking ahead
New Delhi, July 7: In a bid to expand its overseas acquisitions, ONGC Videsh is studying a proposal to scoop up a 5 per cent stake in Rosneft, Russia’s third biggest oil firm, through its initial public offering, petroleum secretary M.S. Srinivasan said today.
“We are in discussions to invest $3 billion through ONGC Videsh in Rosneft. It would be for about a 4.5-5 per cent stake in the company.”
ONGC Videsh, the overseas arm of Oil and Natural Gas Corporation, is in talks for participation in the $11.6-billion IPO. According to sources, Rosneft is planning to offload 13-19 per cent equity through the public issue.
“Discussions are on and no decision has been taken as yet,” he added.
Other companies in the fray for Rosneft are BP Plc and China National Petroleum Co.
ONGC Videsh currently holds a 20 per cent stake in Sakhalin-1 block, which has commenced oil and gas production.
The IPO values Rosneft at between $60 billion and $80 billion. A 5 per cent stake would mean a $3-4 billion investment.
ONGC Videsh already has an MoU with Rosneft in place for co-operation in oil exploration and is keen to build on the relationship.
The company had acquired the stake in Sakhalin I from Rosneft and at that time ONGC Videsh had pipped BP to the deal.
Part of the deal was in the form of a loan extended to the then cash-strapped Russian company.
However, the scenario has changed now with crude oil prices shooting up and Rosneft owning large oil assets.