Russia against an American production head for Imperial Energy
16 September 2010
ONGC Videsh Limited's acquisition of UK-based Imperial Energy has failed to push India's energy interests in Russia, where Imperial Energy mostly operates. Instead it has only brought Russian displeasure over its plan to appoint an American as the production head as also falling production and wage cuts in the Siberian oil fields.
Russian authorities, already peeved at OVL's plans to hold back investments in the field, is now irked by the company's plan to appoint an American as the chief production officer of its West Siberian subsidiary Imperial Energy.
Russian authorities are surprised over OVL's inability to find someone from their Indian staff for the job. The Russian authorities' objection to an American as CEO is that they tend to act irresponsibly, especially in case of a disaster, besides jeopardising the country's security.
OVL snapped up Imperial Energy, the UK firm that discovered oil in a field in western Siberia, two years ago for £1.4 billion (for £12.50 a share) after a bidding war with Chinese oil giant Sinopec.
According to the Russian government sources, at his meeting with Governor Kress in Moscow on May 21
Russian prime minister Vladimir Putin is also reported to have signalled that India's chances of getting new stakes in Russian hydrocarbon assets would be linked to Imperial's performance.