Date:08/11/2008 URL: http://www.thehindu.com/2008/11/08/stories/2008110855911800.htm

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Russia clears OVL’s Imperial buy

Vladimir Radyuhin

Deal augurs well for India’s further expansion

MOSCOW: The Russian Government has approved ONGC-Videsh’s acquisition of Imperial Energy in a move that gives India broader access to Russian energy resources.

“We cleared the deal day before yesterday (Wednesday),” a spokesman for Russia’s anti-trust agency, said on Friday.

This means the Federal Anti-Monopoly Service gave green light to the deal immediately after India’s Petroleum and Natural Gas Minister Murli Deora met Russia’s Prime Minister Vladimir Putin on November 5.

Earlier Russia’s Ministry of Natural Resources cleared the acquisition.

OVL beat Sinopec of China in the $2.6-billion takeover of London-listed Imperial Energy. It is OVL’s biggest oversees acquisition and the second investment in Russia.

In 2001 OVL won a 20-per cent stake in the Sakhalin-1 oil and gas consortium headed by U.S. major Exxon.

Imperial Energy owns a number of licenses in the West Siberian region of Tomsk, the Kamchatka Peninsular in the Far East and in Kastanai in North-Central Kazakhstan. It produced 10,000 barrels a day in December 2007, and plans to produce 35,000 barrels a day by the end of 2009 and 80,000 barrels a day by 2011, all of which could be shipped to India.

The deal augurs well for India’s further expansion in the Russian energy sector. During his meeting with Mr. Putin the Petroleum Minister also discussed OVL’s participation in the Sakhalin-3 oil and gas prospect and joint ventures with Russian energy companies.

Mr. Putin will be sending his Energy Minister Sergei Shmatko to New Delhi later this month to discuss further cooperation.