ONGC chairman defends acquisition of Imperial Energy

Calcutta News.Net
Saturday 3rd January, 2009 (IANS)

Defending the acquisition of Imperial Energy, the state-run oil producer Oil and Natural Gas Corp (ONGC) has said the British energy major's potential was 'very good'.

ONGC recently managed to get approval from 97 percent of the shareholders of Imperial Energy for its offer for acquisition at $1.89 billion (or 12.50 pounds per share).

The Leeds-based Imperial Energy has hydrocarbon assets in Russia and Kazakhstan, especially several blocks in western Siberia.

ONGC chairman R.S. Sharma said Friday evening that contrary to reports, the value of the Kazakhstan block had not been taken into account while calculating the asset's worth.

'Valuation of Kazakhstan block was zero in our value. We knew that the block did not have potential and will not be renewed by Imperial,' he said.

There were also criticisms that ONGC did not revise the deal, as the offer was made when oil prices were around $130 per barrel.

But Sharma remained unfazed. 'When we had ventured to develop Bombay High, all sorts of apprehensions were voiced. Even when we went to Sakhalin, there was a lot of criticism. Similarly in Sudan. All these ventures proved to be very successful,' he said.

On the Imperial Energy purchase, he said the potential was 'very good', describing it as of 'great significance' for the company.

Sharma indicated that a major announcement was likely during this month on the acquisition, where ONGC will unveil its strategy to harness the British company's assets.

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