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Rediff News  All News  » Business » Putin likely to clear OVL's Russian buy before Dec

Putin likely to clear OVL's Russian buy before Dec

October 27, 2008 18:25 IST
Russian Prime Minister Vladimir Putin is likely to clear the acquisition of Imperial Energy by ONGC Videsh Ltd ahead of the Indo-Russian summit in New Delhi in December, as the asset has been found to be of  'non-strategic' nature, media reports suggest.

Imperial Energy, which operates in Siberia's Tomsk region and far eastern Kamchatka, has no strategic fields and deposits under its control, business channel RBC TV reported quoting sources in the natural resources and environment ministry.

The London-based oil company owns a number of licences and hopes to produce 35,000 barrels per day (bpd) by the end of 2009 and 80,000 bpd by 2011, which could be directly exported to energy-hungry India.

The OVL's case will now go to the Federal Anti-Monopoly Service -- the watchdog for mergers and acquisitions by -- passing the Federal Security Service before it is approved by Putin, who heads the government commission on
foreign investments.

OVL acquired Imperial Energy for about $2.6 billion pending the clearance by the Russian M&A

However, the agency said that so far it has not received any written communication from the natural resources ministry and were unable to say how long it could take to make the decision.

Due to the procedural delays in closing the deal Petroleum Minister Murli Deora's visit scheduled for October 23-24 was postponed.

Moscow is keen on qualitative shift in the economic relations with energy-hungry India on the backdrop of global financial crisis, which could lead to long recession in the European economy lowering the demand for the Russian hydrocarbons -- the main source of Russian foreign exchange earnings.

So experts here believe that the deal could be closed on the eve or during the maiden India visit of President Dmitry Medvedev in the first week of December.

Imperial would be the biggest overseas acquisition for OVL and second in Russia since 2003 when it picked the 20 per cent stake from state-run Rosneft for $1.7 billion in the Exxon Mobil operated offshore field Sakhalin-I under PSA.
Vinay Shukla in Moscow
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