To exchange Imperial Energy ownership for 25-30% in JSC Bashneft.
ONGC Videsh Ltd (OVL), the foreign arm of Oil and Natural Gas Corporation (ONGC), today signed initial agreements to exchange its ownership stake in Imperial Energy, in return for acquiring a 25-30 per cent interest in Sistema’s JSC Bashneft.
Sistema is the largest diversified public financial corporation in Russia and the CIS countries. Bashneft produces 13 million tonnes of oil from its Russian fields and also owns refineries with a combined capacity of 20 million tonnes. Imperial Energy is a UK-based petroleum exploration and production company, operating in Russia; ONGC had bought its entire stake in 2008.
These were part of various agreements signed during the ongoing official visit of the President of the Russian Federation, Dmitry Medvedev, to India.
As part of the deal, OVL will also get a part of Sistema’s 49 per cent stake in RussNef, that has fields in Russia producing 12 million tonnes of oil annually, and a stake in the Trebs and Titov fields that Bashneft won recently.
Imperial Energy, which it had bought for $2.1 billion in 2008 and is now supposed to be given away, produces a little over a million tonnes of crude oil annually. Sistema owns 75 per cent stake in Bashneft and, together with persons acting in concert, controls over 90 per cent.
OVL said the agreement also covers any other oil and gas assets which Sistema or Bashneft may acquire before definitive agreements are signed. “The parties further agree to consider joint investments in each other’s existing and future exploratory assets in certain third countries,” the statement said.
More From This Section
ONGC proposes to lead a consortium of Indian oil sector public sector companies to consider acquiring the stake offered by Sistema under the agreement, it added. “The parties have agreed a milestone date of June 30, 2011, by which to formulate the terms for potential transaction,” OVL said.
ONGC chairman and managing director and OVL chairman, R S Sharma, said: “Sistema had been scouting for a strategic partner having experience in the oil and gas sector. Given that ONGC has a proven track record of over 50 years in the oil and gas business worldwide, the partnership should establish synergistic value to the growth plan of the two groups in the oil sector of Russia.”