Smooth sailing

New Delhi, Nov. 7: Russia’s anti-trust office has approved ONGC Videsh’s plan to acquire Imperial Energy.

Sources in ONGC’s overseas arm said, “We have heard about the Russian clearance but have not been officially informed about the decision.”

The clearance for the proposed £1.4-billion acquisition of Imperial Energy, a Russia-focused British oil exploration company, comes within days of petroleum minister Murli Deora’s meeting with Russian Prime Minister Vladimir Putin in Moscow.

“We have done our job. We cleared the deal after the (Russian) ministry of natural resources deemed Imperial Energy’s assets non-strategic,” the spokesman for the anti-trust office said.

During his talks with Russian leaders, Deora had raised the issue of OVL’s participation in future Sakhalin oilfield projects. While the stakeholders of Sakhalin-I and II projects have already been decided, Russia is planning to invite bids for Sakhalin-III and IV.

Imperial Energy will be ONGC’s biggest acquisition overseas. ONGC had beaten China Petroleum and Chemical Corporation in the race for Imperial.

In August, ONGC had proposed to acquire the London-based Imperial Energy for 1,250 pence a share, valuing it at around £1.4 billion.

On funding the deal, ONGC chairman R.S. Sharma had said, “We are a cash-rich company and funding is not a problem. ONGC has reserves of about $4.3 billion, of which $2 billion is in cash. We may go for $1 billion bridge funding and the remaining $1.8 billion will be from internal resources.”

This is ONGC’s second investment in Russia. The company has a 20 per cent stake in the Sakhalin-1 oil and gas consortium headed by US company Exxon.

Russian energy minister Sergy Shemato will visit New Delhi this month to explore the possibility of Rosneft Oil Company picking up a stake in Imperial Energy.

ONGC will be keen to have Rosneft Oil Company as its local partner in Imperial as it already has a tie-up with Rosneft for oil equity in the Siberian region.