Sujay Mehdudia

Russia’s approval sought for takeover of energy firm

NEW DELHI: The much-awaited meeting between Petroleum and Natural Gas Minister Murli Deora and Russian Prime Minister Vladimir Putin to seek Russia’s approval for ONGC Videsh Limited (OVL)’s takeover of U.K.-based Imperial Energy has been rescheduled for November 4.

“I was supposed to meet Mr. Putin on October 24 in Moscow but now that meeting has been rescheduled for November 4. He has been very accommodating and I am positive that we will be able to seal the deal with the help of our Russian friends,” Mr. Deora said. OVL has bid for Imperial Energy for $2.59 billion and it has been approved by the Board of Directors of Imperial Energy. The matter is now to be placed before the shareholders for final approval.

However, the acquisition requires approval from Moscow as the company has huge assets in Tomsk region of Western Siberia and OVL has already floated the idea of joining hands with a Russian company to carry forward the deal.

Mr. Deora has taken up the issue through various channels to persuade the Russian leadership to give the nod. “We hope to achieve success in our efforts soon,” Mr. Deora said. In late August he took up the matter at Dushanbe with Russian President Dmitry Medvedev and the latter had responded positively. The Imperial deal would be the biggest overseas acquisition for OVL if it materialises. Imperial produced about 10,000 barrels of oil per day in December 2007 and is aiming to raise this to 80,000 barrels per day (four million tonnes a year) by the end of 2011, all of which can be shipped to India.

The board of Imperial in August had recommended OVL’s 1,250 pence a share bid.