Steel, software, luxury cars and now, oil. Corporate India’s overseas shopping binge in the land of its former colonial masters is finding new shades.
State-run oil exploration major ONGC’s overseas arm on Tuesday sealed its $2.6 billion deal to take a majority stake in Britain’s petroleum-rich Imperial Energy Corporation Plc, after having beaten Asian rival China in an Olympian tussle a day after the Games ended in Beijing. Hindustan Times first reported about the likely deal last week.
Imperial Energy will be a jewel in the crown for ONGC and enable India to unlock the value of the British firm’s Russia-focused assets.
Under the terms of the share offer, Imperial Energy shareholders will be entitled to receive 1,250 pence in cash for each Imperial Energy share held.
The offers together value Imperial Energy at approximately £1.4 billion ($2.6 billion), an ONGC Videsh Ltd (OVL) statement said.
“The acquisition represents an important addition to OVL’s operations,” said RS Butola, managing director, OVL. “We view this as an important opportunity to expand on the continuing co-operation between Russia and India in the energy sector.”
The bid was made through a wholly-owned subsidiary of OVL. This deal will strengthen ONGC’s overseas presence, which currently stands at 38 oil and gas projects in 18 countries.
Imperial Energy, set up in 2004, is based in Leeds, UK. It has a growing portfolio of oil and gas interests in West Siberia with reports pegging the recoverable assets at 9,00,000 barrels per day.
In 2005, ONGC and the LN Mittal group combine had lost the bid to acquire PetroKazakhstan Inc to China National Petroleum Corporation.
In 2006, OVL had bought 15 per cent of ExxonMobil’s stake in the Campos Basin in Brazil for $1.4 billion.
“Imperial Energy’s Directors are pleased to have been able to reach agreement with OVL and intend unanimously to recommend shareholders accept the proposed offer, which reflects a fair value and marks a premium of 62 per cent since the day before Imperial Energy first announced it had received an approach,” said Peter Levine, executive chairman, Imperial Energy.