ONGC Acquires UK's...

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[Oil and Natural Gas Corp (ONGC) has taken control of Imperial Energy Plc for 1.3 billion pound ($&nbsp;1.9 billion) after an overwhelming 96.8 per cent of London-listed firm's total shareholders accepted its takeover offer. The deadline for the state-owned firm's 12.50 pounds per share offer closed yesterday and 99,241,110 or 96.8 per cent of the shares were tendered, ONGC Videsh Ltd informed the London Stock Exchange. ONGC Chairman R S Sharma said the company owed the acquisition to the Government support, which has seen OVL in the past seven years increase its number of projects to 39 in 17 countries, from just a single project in Vietnam. ONGC Videsh Ltd, the overseas arm of the state explorer, needed 90 per cent shareholders to approve its deal, which will result in delisting of Imperial. Imperial will be delisted from LSE after it &quot;squeezes out&quot; the remaining untendered shares by posting them cheques of the offer amount and telling the shareholders that these untendered shares were no longer valid. Imperial, the Leeds-based firm that has oil producing blocks in Tomsk region of western Siberia in Russia and Kastanai in north-central Kazakhstan, would be the biggest overseas ever acquisition by OVL. It had paid&nbsp;$1.7 billion to buy a 20 per cent stake in Exxon Mobil Corp's Sakhalin-I field in Russia and&nbsp;$785 million for a stake in the Greater Nile project in Sudan, both in 2003. OVL will fund the transaction through a combination of loans from the parent company worth $1 billion-equivalent rupee loan. ONGC would lend close to $1-billion to fund the transaction at 5.96 per cent interest rate. The entire acquisition and subsequent delisting may take two to three weeks, the source added. Sharma said the government had time-and-again helped the firm acquire assets abroad to supplement domestic resources. &quot;I must say, we have received generous government support for all our deals.&quot; Imperial has in place reserves of about 3.4 billion barrels of oil equivalent (boe), and the takeover would increase ONGC's reserves by around 20 per cent. Imperial made great efforts to encourage its investors to vote in favour of the deal as it was concerned that ONGC would withdraw its bid if 90 per cent shareholders did not accept the takeover, and then may come back with a lower offer. Since OVL unveiled the deal in August, oil price have slumped from around&nbsp;$130 a barrel to $40, casting doubt on the economics of the takeover. Returns on investment have fallen to three to four per cent from 12.6 per cent estimated keeping crude oil price of $100 per barrel in mind. In a submission to the UK Takeover Panel when ONGC tried, unsuccessfully, to delay the posting of its offer document, Imperial suggested the Indian government, which owns a majority stake in ONGC, wanted to reduce the offer price. When the Indian Cabinet approved the proposal in August 2008, Imperial was producing oil around 7,000 barrels per day (bpd), targeting to increase the production to 25,000 bpd by the end of 2008 and 80,000 bpd by the end of 2011. The production is likely to go up to 130,000 bpd by end of 2015. Imperial had 920 million barrels of oil equivalent of 2P (proved plus probable) hydrocarbon reserves. D&amp;M, an independent US reservoir firm had put the 3P (proved plus probable plus possible) reserves around 3.4 billion boe. 1P (proved) reserves have at least 90 per cent probability while 2P and 3P reserves have at least 50 per cent and 10 per cent probability respectively. (PTI)