Indians expand their empire

Russian oil company Imperial Energy has agreed to be sold to ONGC

The first foreign buyer of Russian oil and gas assets this year will be the Indian Oil & Natural Gas Corp. (ONGC). The company is ready to buy 100% of the shares of the British Imperial Energy, which owns about 20 fields in Russia and Kazakhstan. ONGC has made an offer to the British company, which Imperial Energy's board of directors recommends its shareholders accept. As Imperial Energy told Vremya Novostei, ONGC is offering 12.5 pounds per share. Thus, if all shareholders sell their shares to Indians, the transaction price, including Eurobond obligations, will be 1.4 billion pounds sterling ($2.58 billion). An extraordinary meeting of Imperial Energy shareholders, where the final decision on the fate of the company will be made, will take place after its sale is authorized by the Federal Antimonopoly Service. Against the backdrop of information about an imminent sale that appeared in early July, Imperial Energy's capitalization increased by more than half: at the close of trading last Friday, the British company's quotes reached their highest level in the last seven months and amounted to 12.5 pounds, which, as noted by Imperial Energy, 61.9% higher than the value of its securities as of July 11.

British Imperial Energy was created in 2004 to work on Russian and Kazakh fields. The company's subsidiaries - Nord Imperial, Allianceneftegaz and Sibinterneft - own 17 licenses for areas in the Tomsk region. In Kazakhstan, a British company holds a license for the North Turgai geological exploration block in the Kustanai region. According to SPE classification, at the beginning of this year the company's total reserves amounted to 118 million tons of oil. Daily production now amounts to 6.4 thousand barrels. However, the company plans to increase this figure to 25 thousand barrels by the end of the year. And by the end of next year, Imperial Energy hopes to produce 35 thousand barrels per day.

The British company has long been of interest to investors. In November last year, Gazprombank negotiated the acquisition of up to 25% of its shares, but the deal never took place: it is believed that the British were not satisfied with the price offered by the Russian bank. At the same time, the company then had problems with the deputy head of Rosprirodnadzor Oleg Mitvol - he accused it of overstating the reserves of its fields in order to create greater attractiveness in the eyes of foreign investors. To inform them about the real state of affairs at Imperial Energy, Mr. Mitvol even went on a business trip to New York, where he met with representatives of American investment funds investing in shares of Russian commodity companies. True, it later turned out that the British did not inflate their reserves at all, but simply used other calculation systems.

In addition, the Chinese Sinopec also showed interest in Imperial Energy, although the company was not satisfied with its offer.

But the British were quite active in negotiations with ONGC. As Imperial Energy explained to Vremya Novostey yesterday, ONGC made a purchase request twice, and after the Indians analyzed the state of affairs in the company, they made a final offer. It is noteworthy that ONGC has long been trying to gain a foothold in the Russian oil and gas market: it owns a 20% stake in the operator of the Sakhalin-1 project. According to unofficial information, the company is also interested in purchasing a stake in the Veninsky block, which is part of Sakhalin-3.

Kirill MELNIKOV