Indian state-run oil company Oil and Natural Gas Corp (ONGC) announced a $2.6 billion deal on August 26 to buy Russia-focused Imperial Energy as it seeks new fuel sources to power the country's fast-growing economy.
The bid offered shareholders a 62% premium on the stock price.
Imperial Energy executive chairman Peter Levine founded the oil and gas exploration firm whose energy fields are mainly in the Tomsk region of Western Siberia in 2004. Imperial Energy has proven reserves of 864 million barrels of oil and 56 million barrels of gas. It produced about 10,000 barrels of oil per day in December 2007 and aims to raise this to 80,000 barrels per day or four million tons a year by 2011.
"Imperial Energy has grown significantly from a pure exploration company and as Imperial Energy moves into the next phase of its development, with production increasing further over the coming years, it makes strategic sense to be part of a larger group," Levine said.
The purchase would be the biggest ever by ONGC, which has frequently been beaten to the punch by deep-pocketed China as the two countries scour the world for energy supplies to feed their booming economies. India imports 70% of its oil needs.
It was still uncertain whether China's state-run oil refiner Sinopec would bid for Imperial Energy, which explores for oil and gas in both Russia and in Kazakhstan. Sinopec has indicated it has not yet made up its mind.
The deal needs the approval of Moscow, which has been steadily exercising tighter control over its energy assets. Some analysts said Russia may have given the agreement its blessing, seeing India as a good fit because of the two countries' close ties during the Cold War years.
The bid trumps the $1.7 billion ONGC paid to acquire a slice of Exxon Mobil's Russian Sakhalin-I field and the $785 million it shelled out for a stake in the Greater Nile project in Sudan, both in 2003.
Copyright Agence France-Presse, 2008