India’s flagship ONGC Videsh today said it has no plans to appoint an American to head Imperial Energy, the Russia-focused oil firm it acquired recently and is in the process of boosting its crude oil output by over 30 per cent.
“Imperial Energy currently produces about 16,700 barrels per day and we have a target of 25,000 bpd (1.2 million tonnes) by close of the year,” a top company official said.
When OVL, the overseas arm of the state-run Oil and Natural Gas Corp (ONGC), took over Imperial in January 2009, it was producing less than 6,000 bpd of oil from fields in the Western Siberia region of Russia.
The output by the end of the year would help Imperial post maiden cash profits. It had reported cash loss of USD 100 million in 2008.
“We are currently producing oil from four out of the 17 fields and production is optimised and we see peak output of 40,000-45,000 bpd by 2015,” he said.
The official denied reports that OVL was looking at appointing an American to heads its production operations.
“The company is and will continue to have an Indian CEO. It is absolutely false report that we are in the process of appointing an ex-pat American.”
OVL, he said, was fully aware of Russian laws and has a Russian, Vladimir Egorovich Shaftelsky, as the General Director of Imperial. He, along with the CEO, are accountable to the Russian law.
“Imperial Energy, before we took over, had a Brit, Christopher Hopkinson as the CEO. No one raised any issue about foreign origin of the CEO then,” the official said.
He said OVL was looking at hiring a domain expert and one of the possible candidates is an American who currently is working for a Russian oil firm in Russia.
“This person under consideration is already working in Russia and if we are to eventually appoint him, he will be just about chief engineer. Legally, CEO and General Director will continue to be accountable to Russian law,” he said.
The official said though production has not reached the previously set targets by the British owners of Imperial, reserves in the fields have gone up to 946 million barrels from 920 million barrels when OVL had bid for the company in August 2008.
Imperial assets hold a large potential upside for OVL, which the company plans to tap going forward.
OVL, which acquired the London-listed Imperial Energy for USD 2.1 billion, had initially planned an investment of an additional USD 1.5 billion to raise the output to 35,000 bpd by the end of 2010, but has deferred it for doing more analytical studies about the field reservoir.