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ONGC Videsh runs into another roadblock

NEW DELHI: The biggest overseas acquisition of ONGC Videsh Limited (OVL) has run into another roadblock. Russia’s antitrust watchdog, Federal Anti-Monopoly Service (FAS), has sought more time to review the $2.59 billion takeover bid of the U.K.-based Imperial Energy by OVL putting brakes on its fast track approval.

Although the Petroleum and Natural Gas Minister, Murli Deora, is scheduled to travel to Moscow on November 4 to hold talks with Russian Prime Minister, Vladimir Putin, regarding the deal, there is no firm assurance if the deal will get through during this visit. Earlier, Mr. Deora was scheduled to travel to Moscow on October 24 but had to re-schedule his visit. Highly placed sources in the Ministry said FAS had sought more time to review the deal citing reasons that the deal could limit competition.

The FAS has also put details regarding the deal and its review on its website.

India had successfully bid for Imperial Energy in August this year but for the deal to go ahead it must have no strategic assets, and it must then be approved by FAS and the Russian Government. The Russian Natural Resources Ministry had last week cleared the deal terming it as non-strategic.

However, officials maintained that there was nothing unusual in FAS review as it was a standard process. All efforts from the Indian side and that from Russia are focussed on completing the deal as quickly as possible. The FAS has 30 days from the day it receives a bid to reply to the bidder. Officials are hopeful that the deal would be completed much before the visit of the Russian President, Dmitry Medvedev, to New Delhi in December.

The deal is OVL’s second investment in oil-rich Russia as the company is already a partner in the Sakhalin-1 oil and gas consortium headed by U.S. major Exxon.

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