ONGC Videsh Ltd, the overseas arm of ONGC Ltd, has signed a framework agreement with Sistema, the largest diversified public financial corporation in Russia and the CIS, for cooperation in the hydrocaron sector.
The two companies have agreed to consider opportunities for a potential transaction involving (i) Sistema's majority stake in JSC Bashneft and 49 per cent stake in RussNeft, each of which owns and operates numerous fields and refining assets in Russia, (ii) ONGC Videsh's 100 per cent stake in Imperial Energy Corporation, which owns and operates fields in Russia, and (iii) Any other oil and gas assets which the above companies may acquire before definitive agreements are signed.
The parties further agree to consider joint investments in each other's existing and future exploratory assets in certain third countries.
ONGC proposes to lead a consortium of Indian oil sector PSUs to consider acquiring the stake offered by Sistema under the agreement. The two companies have agreed upon the milestone date of June 30, 2011, by which to formulate the terms for potential transactions.
ONGC Chairman R.S. Sharma said that Sistema had been scouting for a strategic partner with experience in oil and gas sector and given that ONGC had a proven track record of over 50 years in the oil and gas business worldwide, the partnership should establish synergistic value to the growth plan of the two groups in Russia's oil sector.
Meanwhile, ANP, the regulatory authority of Brazil, has given approval for farming out in block BM-S-73 in which ONGC Campos Limitada, a wholly owned subsidiary of OVL, had acquired 100 per cent stake in 2007. Similar approval for block BM-S-74 is expected shortly.
The offshore concession is located in the Santos basin and covers an area of 160.04 sq. km. The concession is a part of Brazil's ninth licensing round and is currently in exploration phase.
ONGC Campos Limitada, Petroleo Brasileiro S.A., Petrobras and Ecopetrol Oleo Gas do Brasil LTDA had entered into an agreement under the terms of which Petrobras will get 43.5 per cent share, Ecopetrol will get 13 per cent and 43.5 per cent will remain with ONGC Campos Limitada, the operator of the block.
ONGC Campos Limitada also gets 43.5 per cent share from Petrobras (43.5 per cent) and Ecopetrol (13 per cent) in their block BM-S-74.
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