China to Fight with India for Russia’s Oil
Indian ONGC that is eyeing the purchase of Imperial Energy will have to compete with China’s Sinopec for the oil assets in Russia, according to The Daily Telegraph. Sinopec stepped in on the eve of the price announcement by ONGC.
One of the biggest companies in China, Sinopec, made an offer to buy out Imperial Energy and was sanctioned by its BOD to launch the due diligence. People in Imperial Energy haven’t commented on the issue.
Imperial Energy mostly operates in the Tomsk region, holding 12 licenses for the fields in Russia and a license for Kazakhstan. Its 2P reserves equaled 125.5 million tons of oil equivalent by close of 2007, according to the independent audit of DeGolyer and MacNaughton. The 2007 earnings reached $20 million, the net loss was $43 million. The company produced 114,300 tons of crude oil past year. As of the end of 2007, its biggest holders were Schroeder Investment Limited (10.12 percent), CEO Peter Levin (6.13 percent), Deutsche Bank (5.89 percent), Baille Gifford & Co (5.15 percent), Fidelity International (4.88 percent).
The timing of new buyer’s emergence is interesting. The appearance of Sinopec was reported when Imperial Energy practically agreed on the deal with Indian ONGC, which completed due diligence past week. ONGC is eyeing 100 percent in the company and intends to announce the price this week. People in Imperial Energy said a potential investor was negotiating the price of £12.9 ($25.48) per a stock, i.e. $2.6 billion for the whole company and 67 percent above its market cost two days prior to potential deal’s announcement.
So far, ONGC has had a single asset in Russia, 20 percent in Sakhalin-1 offshore project, which it acquired in 2001. But the company has been attempting to expand here ever since.
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All the Article in Russian as of Aug. 04, 2008
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