NEW DELHI: Buoyed by the ‘fast track’ approval of the Union Cabinet for making a fresh bid and engaging a Russian partner, Oil and Natural Gas Corporation Videsh Limited (OVL) on Tuesday achieved a major victory virtually beat Sinopec of China in the takeover bid for the Britain based Imperial Energy for $2.58 billion (1.4 billion pounds).
Highly placed sources in the Petroleum Ministry informed that OVL had won the approval of Imperial’s board of directors for taking over the Russia-focussed company for 1,250 pence a share.
The acquisition of Imperial Energy is seen as a major ``strategic victory” for OVL that has been at the receiving end of Sinopec of China during the last few years. It is one of the biggest foreign asset acquisitions.
The sources said the fresh bid by OVL had been made possible after the Cabinet Committee on Economic Affairs (CCEA) gave its go ahead to the company despite reservations by some Cabinet Ministers on the issue. Not only OVL was allowed to make a fresh bid but also it was given the authorisation to engage a Russian partner to carry out future operations of the country. ``We are confident that Moscow would respond positively to the development and keeping in mind the friendly relations between the two companies work jointly to achieve the objective of energy security for India. It is important to take Russia along in this venture,” a senior official remarked.
OVL Managing Director R. S. Butola termed the acquisition as an important addition to the company’s operations and felt that OVL’s financial strength and technical expertise would further enhance the attractive growth potential of the business in the Tomsk region.
OVL is mindful that no company can be successful in taking over a company having assets in Russia unless it has the backing of Moscow, and bringing state-run Rosneft on board with a possible 51 per cent stake was being contemplated.
The sources said that in the event of OVL being the successful bidder, it might farm-out majority stake to Rosneft and keep just 49 per cent for itself.
There was no official comment on the developments in the Petroleum Ministry.
Imperial Energy has oil producing blocks in the Tomsk region of Western Siberia in Russia and Kastanai in North-Central Kazakhstan.
It produced about 10,000 barrels of oil a day in December 2007 and is targeting to raise this to 80,000 barrels a day (four million tonnes a year) by the end of 2011.
The Russian Ministry of Natural Resources said Imperial’s Russian Registered Reserves amount to about 450 million barrels of hydrocarbons.
Independent assessment of the reserves by DeGolyer and McNaughton in December 2007 suggested in-place reserves of 920 million barrels of oil equivalent.
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