The Hindu Business Line : Deora hopes to wrap up Imperial deal in 4-5 weeks

New Delhi, Sept 5 The Petroleum Minister, Mr Murli Deora, on Friday said that he hoped that the acquisition of the London Stock Exchange-listed Imperial Energy Corp Plc by ONGC Videsh Ltd (OVL), the overseas investment arm of ONGC, will be concluded in 4-5 weeks.

Speaking to newspersons here after signing an agreement with Colombia for cooperation in energy sector, Mr Deora said, “the deal is subject to the Russian Government approval and we are hopeful they will help us.”

He said that the Russian President has offered to support OVL’s bid for Imperial. “I recently met the Russian President. He directed his advisor to see and help us. It will be a very good deal for the country and I hope it will be concluded in another four-five weeks.”

The Minister, however, did not give any time line, by which approval from Russia can be expected. The Board of Imperial Energy had approved OVL’s bid for 1,250 pence a share to acquire the company. Imperial has its assets in Tomsk region of West Siberia in Russia.

The ONGC Chairman, Mr R.S. Sharma, said the acquisition is to be funded through debt — partly as loans from ONGC and partly as bridge loans. He ruled out any plans of listing OVL to raise resources for the acquisition. He said, “We do not have any plans as of now for listing OVL as ONGC has surplus funds to meet its current appetite for acquisitions.”

Fuel price hike

On the issue of whether any softening of international crude oil prices would result in cut in domestic fuel prices, the Petroleum Minister ruled out any immediate cut in prices. The Minister said international prices will have to soften further for the Government to consider a retail price cut.

“Oil companies are still losing money, we can consider a cut in retail prices only when international crude oil prices fall further,” he said. When asked whether the Government was considering differential pricing for diesel, the Minister said, “we are considering but it is very difficult to implement.”

The three public sector oil marketing companies – Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation – were losing about Rs 400 crore per day on sale of petrol, diesel, LPG and kerosene. The international crude oil prices have dropped close to $106 a barrel after touching a high of $147 .

As regards, whether the fluctuation in currency (rupee) could also be one of the factors for oil companies feeling the strain, industry sources said, it does impact the physical outgo to some extent but the larger concern is global crude prices.

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