ONGC denies Russia asset merger report

We are in discussion but nothing has been finalised. No such proposal was put up for cabinet,ONGC Chairman A.K. Hazarika said. This news is incorrect.

ONGC has long eyed a deal with Bashneft,a unit of telecoms-to-oil group Sistema as well as involvement in the Arctic fields of Trebs and Titov,as it seeks to broaden its oil and gas base in Russia,the world’s top energy exporter.

But a merger of Bashneft and RussNeft is a long way off. Last week,Sistema President Mikhail Shamolin said the company may consider merging Bashneft and RussNeft once the latter’s debt falls below $4 billion,but given current oil prices it may be a few years before that debt falls to the required level,the Interfax agency reported.

ONGC already has a stake in Russia’s Sakhalin-1 oil and gas project in the Pacific,and in 2008 it acquired the Imperial Energy oil company in western Siberia.

Last December,Sistema and ONGC signed a non-binding agreement to consider asset swaps and joint tapping of Russia’s energy deposits. At 10:55 a.m. (0525 GMT),shares in ONGC were trading 2.1 percent lower at 260.30 rupees in a Mumbai market down 1.8 percent.

ONGC to merge Russian assets with Bashneft,RussNeft-report

It was earlier reported that the Indian cabinet has approved a merger of ONGC’s Russian assets with Bashneftand RussNeft in a deal that will give the Indian state-run explorer a 25 percent stake in the combined entity and access to one of the biggest discovered oilfields in Russia.

Oil and Natural Gas Corp (ONGC) has long been eyeing Bashneft as well as an involvement in the Arctic fields Trebs and Titov that the Sistema subsidiary acquired last year from the Russian state.

The merger will give ONGC a quarter share in the Russian firm’s annual oil production of 25 million tonnes besides partnerships in their refineries totaling 20 million tonnes capacity,the newspaper said on Monday without revealing how it got the information.

Indian Oil Corp may also join ONGC in the venture,the paper said,citing officials in the oil ministry.

ONGC and Indian Oil could not immediately be reached for comment.

ONGC already has a stake in Russia’s Sakhalin-1 oil and gas project in the Pacific,and in 2008 it acquired the Imperial Energy oil company in western Siberia.

Last December,the Russian oil-to-telecoms holding firm Sistema and ONGC signed a non-binding agreement to consider assets swaps and joint tapping of Russia’s energy deposits.