No pre-condition to OVL's Imperial buy: Russia

In a boost to ONGC Videsh's (OVL) bid to buyout Imperial Energy Corp Plc, Russia today said it will not set any pre-condition like a stake for its state-run firms in exchange of giving approval to the acquisition.

"Actually our approach towards this deal is quiet liberal and if the Indian company would like to acquire Imperial Energy, we are not going to put forward any demands," visiting Russian Energy Minister Sergey Shmatko told reporters here.

OVL, the overseas arm of state-run Oil and Natural Gas Corporation (ONGC), was expecting that it may have to give 25-40 per cent stake to a Russian company like Rosneft in lieu of the regulatory approvals Kremlin gave for its acquisition of UK-listed firm.

ONGC Chairman and Managing Director R S Sharma said the company had the time till June 2009 to complete the deal but it will close it much before the deadline.

A source associated with the transaction said that in spite of fall in international oil prices, OVL will not revise its 12.50 pounds a share buyout of Imperial Energy as the acquisition priced UK-listed firm's in-place oil reserves at $2.5-3 per barrel.

"OVL has valued Imperial's 2P (proven and probable) oil and gas reserves at $2.5-3 per barrel and the acquisition even at current oil prices is enormously beneficial," the source said.

Imperial explores for oil in Russia's Siberia region and had the equivalent of 920 million barrels of proven and probable oil reserves as on December 2007, according to an audit by DeGolyer & MacNaughton. '2P' tag means a 50 per cent likelihood of recovery of the reserves.

Acquisition of Imperial will cost OVL about 1.4 billion pounds or $2.1 billion at current exchange rates.