Deal particulars: ONGC has agreed to acquire Imperial Energy Corp through its wholly-owned subsidiary, ONGC Videsh (OVL), for about Rs 11,260 crore. This all-cash deal is at a premium of 36.3 per cent to the monthly average price of the Imperial stock.
Impact analysis: The acquisition is in line with ONGC’s strategy to increase its oil & gas assets abroad to secure India’s energy requirements. Imperial produced about 10,000 barrels of oil per day in December 2007 and this is expected to increase to 25,000 bpd by the end of 2008 and 35,000 bpd by the end of 2009. This acquisition will help ONGC increase production as well as mitigate concerns about the mature state of its domestic reserves. The deal is still awaiting Russian regulatory approval, which is not expected to be a problem.