Mumbai / Moscow: India’s biggest exploration company, Oil and Natural Gas Corp. Ltd (ONGC), agreed to buy Russia-focused British oil and gas firm Imperial Energy Plc. for £1.4 billion (Rs11,382 crore) to tap Siberian deposits and make up for dwindling output at home.
ONGC’s overseas arm, ONGC Videsh Ltd (OVL), has made a cash offer of 1,250 pence a share, worth 61.9% more than Imperial Energy’s share price on 11 July, the day before the London-based company said it received a bid, according to a statement distributed by Regulatory News Service.
China Petroleum and Chemical Corp., known as Sinopec, indicated on Tuesday it may bid for Imperial Energy as well.
Crediting OVL for the deal, R.S. Sharma, chairman and managing director of ONGC, said: “After a very long time, we have done such a substantial transaction and the Imperial’s assets will add value to our company.”
Indian explorers are looking to invest in oil projects in Russia, Kazakhstan, Iran and Africa as the government expects economic growth to accelerate to as much as 10% by 2012, fuelling demand for vehicles and electricity. The country imports more than three-quarters of its oil requirements.
Imperial Energy has 450 million barrels of Russian registered reserves, according to a company statement. The company, which operates primarily in the Siberian region of Tomsk, had 920 million barrels of oil equivalent of proven and probable reserves as of December 2007, according to an audit by DeGolyer and MacNaughton. Drilling successes at the Kiev Eganskoye field on the east side of the Ob River came after the yearly DeGolyer and MacNaughton audit and will likely increase valuations in the next report.
Shares in ONGC gained Rs3.55, or 0.35%, to Rs1,015.45 at the close in Mumbai trading. Imperial Energy declined 0.7% to 1,231 pence in London after reaching a seven-month high last week.
Utpal Bhaskar of Mint contributed to this story.