Russia's President Medvedev backs OVL's bid for Imperial Energy takeover

29 August 2008

Mumbai: Russian President Dmitry Medvedev has offered to back ONGC Videsh Ltd's £1.42-billion pound takeover of the Russia-focused Imperial Energy, officials accompanying union petroleum minister Murli Deora at the Shanghai Cooperation Organisation summit in Dushanbe, the capital of Tajikistan, said.

Deora, who had talks with Medvedev on the sidelines of the Dushanbe summit, is believed to have sought his support for the OVL deal. 

''The Russian president promised to support OVL and even called his energy advisor to issue instructions,'' said an official.

UK-registered Imperial Energy, with assets in Tomsk region of the western Siberia in Russia, is OVL's biggest overseas acquisition so far and the final deal is contingent upon Kremlin's approval.

Imperial Energy will give OVL, which already has a 20 per cent stake in Sakhalin-1 project in Far East Russia, access to Siberia, an area believed to hold huge hydrocarbon reserves.

While the board of Imperial had recommended OVL's $2.6 billion bid, it has to win approval of Russian authorities for the transaction to materialise. Russia may insist on selling part of the Imperial stake to a Russian state oil group.