ONGC and Russian company Siestema will now merge their oil and gas businesses in Russia under a joint venture. As per this no-cash deal, the Indian company will have a 25% shareholding along with a say in management.
The merger of 3 companies – namely Bashneft, RussNeft and Imperial Energy – will make the Indian conglomerate a shareholder in the Russian firms. The annual oil production for these firms is around 25 million tones plus the output of these fineries is approximately 20 million tonnes. An oil ministry official stated that India’s largest refiner – Indian Oil Corporation – will also join ONGC in the venture.
ONGC is also merging its wholly-owned subsidiary Imperial Energy into the new company. ONGC will especially manage oil and gas assets of the merged entity and is hoping to excel at it due to its experience. “It is a frame-work agreement. We will soon negotiate specific terms of an agreement in this regard,” an ONGC official said. The agreement was signed on Tuesday by Sistema chairman Vladimir Evtushenkov and ONGC Videsh managing director RS Butola during Russian President Dmitry Medvedev’s visit to India.
Sistema, the Russian player, had been scouting for partners with sufficient experience in the oil and gas sector. It is also a financial corporation that manages telecommunication, healthcare, energy, aerospace, banking, tourism and retail companies.
The merger of 3 companies – namely Bashneft, RussNeft and Imperial Energy – will make the Indian conglomerate a shareholder in the Russian firms. The annual oil production for these firms is around 25 million tones plus the output of these fineries is approximately 20 million tonnes. An oil ministry official stated that India’s largest refiner – Indian Oil Corporation – will also join ONGC in the venture.
ONGC is also merging its wholly-owned subsidiary Imperial Energy into the new company. ONGC will especially manage oil and gas assets of the merged entity and is hoping to excel at it due to its experience. “It is a frame-work agreement. We will soon negotiate specific terms of an agreement in this regard,” an ONGC official said. The agreement was signed on Tuesday by Sistema chairman Vladimir Evtushenkov and ONGC Videsh managing director RS Butola during Russian President Dmitry Medvedev’s visit to India.
Sistema, the Russian player, had been scouting for partners with sufficient experience in the oil and gas sector. It is also a financial corporation that manages telecommunication, healthcare, energy, aerospace, banking, tourism and retail companies.