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ONGC starts Imperial drill

New Delhi, Sept. 19: Oil and Natural Gas Corporation (ONGC) plans to take a bridge loan of $1 billion to part-fund the acquisition of UK’s Imperial Energy.

R.S. Sharma, chairman of ONGC, said the loan could be a mix of local and overseas borrowings.

Last month, ONGC Videsh Limited had acquired Imperial for $2.59 billion.

The company is now awaiting approval from Russian authorities. Imperial’s primary operations are in western Siberia.

For the remaining $1.59 billion, ONGC will give a loan at 6 per cent interest. Sharma said ONGC might sell its stake in Indian Oil Corporation and GAIL (India) Limited. “We have all options before us. Funding is not an issue,” he said.

Investment plan

ONGC said it would invest Rs 19,338 crore in oil and gas exploration in the current fiscal, 10 per cent more than in the previous year.

The focus is on improving the reserve replacement ratio, which is the ratio of new reserves to oil production. Other priorities include arresting the decline in mature fields and quick development of discovered fields.

The company will invest Rs 1,30,043 crore in the Eleventh Five Year Plan (2007-2012) and over $5 billion (around Rs 22,500 crore) in its oil blocks in the Krishna-Godavari basin.

In the April-June quarter, it earned $123 per barrel on crude it produced but got only $69.14 per barrel after paying for subsidies.

ONGC declared a final dividend of Rs 14 per share for 2007-08, over and above the interim dividend of Rs 14 per share announced in December.

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