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ONGC not to revise Imperial bid

NEW DELHI: Notwithstanding the financial turmoil around the world, Oil and Natural Gas Corporation (ONGC) on Friday asserted that it will not revise its $2.59 billion bid to acquire U.K.-listed Imperial Energy and the company had enough liquidity to fund the transaction.

Speaking to newsmen here, ONGC Chairman and Managing Director R. S. Sharma said the company did not foresee any kind of revision in the price bid for Imperial especially in view of the fall in crude oil prices.

International oil prices averaged around $115-120 a barrel in August when ONGC made the 1,250 pence a share successful bid to acquire Imperial that has oilfields in Russia.

Crude oil prices have since fallen below $70 a barrel. Crude prices decide the value of acquisitions in the oil and gas sector as they indicate the monetary value of the reserves in ground.

However, Mr. Sharma said ONGC and its overseas arm ONGC Videsh Limited (OVL) had enough liquidity to fund two more such transactions. “We are a zero debt company. We do not rely on borrowings for our investment plans. We have adequate liquidity to meet our requirements. The global financial crunch would have a very limited impact on ONGC,” he said.

ONGC, he said, had arranged for a $1 billion bridge loan to boost confidence. “If situation arises where foreign debt is not available we have liquidity available to fund the acquisition.

Mr. Sharma also said ONGC had not slowed down on overseas acquisition and it was felt that time was ripe to step up such efforts. The company, at any given point of time, looks at 6-10 opportunities.

Union Petroleum and Natural Gas Minister Murli Deora will next week visit Moscow to get Kremlin’s approval for the acquisition of Imperial.

Mr. Deora is likely to meet Prime Minister Vladimir Putin on October 24.

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