OVL, Rosneft deal to buy Sibneft

ONGC Videsh (OVL), the foreign arm of ONGC, is eyeing equity in Russia's fast growing oil firm Sibneft, and has tied up with Russian firm Rosneft for the purpose.

"OVL and Rosneft have entered into a confidentiality agreement to acquire Sibneft," a senior company official said.

Rosneft had made it clear that OVL would be its first preferred partner for such acquisitions, but OVL now expects the situation to change after its merger with Gazprom. Independent observers feel that the Rosneft-Gazprom combine would be the ultimate beneficiary of Sibneft.

OVL, which made unsuccessful attempts to tie-up with Gazprom to bid for acquiring Yukos' main producing asset Yuganskneft, also plans to participate in the vast, yet to be-developed east Siberian field.

Rosneft, Gazprom and Surgutneftegaz have been given east Siberia and the far east for development by the Russian government. With the Rosneft-Gazprom merger, the east Siberian fields would soon be taken up for development.

The official said OVL was also eyeing stake in Russia's Vankor oil and gas field, and is looking at two other exploration blocks of Rosneft.

OVL was also looking at partnering Rosneft in the Sakhalin-3 oil and gas fields in far east Russia. It is aiming at 10-20% stake in the three fields forming the Sakhalin-3 project, he said.