Moscow: Russia cleared on Friday Indian energy firm Oil and Natural Gas Corp. Ltd’s $2.6 billion (Rs12,428 crore) takeover of Russia-focused Imperial Energy Corp. Plc., in a move further strengthening Russian ties with major Asian energy consumers.

Imperial’s stock jumped by 20% and ONGC rose by 5% after the spokesman for Russia’s anti-trust office said his agency had cleared the bid by ONGC. “We have done our job. We cleared the deal after the ministry of natural resources deemed Imperial Energy’s assets non-strategic," Sergei Noskovich said.

India’s biggest oil producer agreed the takeover of Imperial in late August. The deal marks ONGC’s second investment in Russia, where the company already has a 20% stake in the Sakhalin-1 oil and gas consortium headed by US company Exxon Mobil Corp.

Better energy ties: Imperial Energy storage facilities in Siberia. State-owned ONGC beat Sinopec to snatch the Russia-focused oil explorer, whose assets are mainly in the Tomsk region of Siberia. Bloomberg

Industry sources close to the deal have said the Kremlin would likely expect ONGC to sell a stake on to a Russian state oil group, such as OAO Rosneft, that country’s biggest oil producer.

Such a move would follow a recent pattern of the state-backed firms winning major stakes in big, formerly privatised energy assets.

In 2006, Sinopec bought OAO Udmurtneft, a 120,000 barrels per day crude production unit, from London-based BP Plc.’s Russian unit TNK-BP Holding OAO for about $3.5 billion, but later sold a 51% stake to Rosneft.

Beijing and New Delhi have ordered their state oil companies to buy up oil and gas assets overseas to ensure future energy supplies.

The location of Imperial’s fields means ONGC is unlikely to ship oil from them to India, but its ownership provides a hedge against rising energy costs.

ONGC’s overseas arm, ONGC Videsh Ltd, had agreed to pay 1,250 pence in cash for each of its shares, but doubts over whether the deal would proceed meant Imperial shares have traded well below this in recent weeks.

ONGC has said the deal would go ahead despite the financial crisis, which has delayed many deals across different industries amid the virtual closure of capital markets. The approval is good news for the troubled hedge fund industry, which is suffering as returns plummet and clients withdraw cash, as funds had bet heavily on the deal going through.

“The transaction is a very strong indication that Russia and India are continuing to strengthen energy ties," said a fund manager with a stake in Imperial.

“It shows that countries like India and China have the appetite for mergers and acquisitions with a long-term view despite what short-term minded markets are telling them," he added.