[Pen-l] Rise of the East?

[Louis Proyect <lnp3@xxxxxxxxx>]

August 27, 2008
Indian Oil Producer Bids for British Rival
By REUTERS

LONDON — India’s largest oil producer ONGC has agreed to a £1.4 billion 
or $2.6 billion takeover of Russia-focused oil explorer, the Imperial 
Energy Corporation, as it works to secure energy to fuel India’s 
expanding economy.

Imperial, which is based in London, said on Tuesday that ONGC’s overseas 
arm, ONGC Videsh, would pay 1,250 pence in cash for each of its shares 
in a deal that could double state-owned ONGC’s proved and probable reserves.

“This is a good price, given consideration for the current softening in 
oil prices, the turbulence on global stock markets and the geopolitical 
stage,” analysts at brokerage firm Daniel Steward said in a research note.

But Andrey Gromadin at JPMorgan Chase said a possible rival bid from 
China could push the price higher.

“We believe 1,250-1,500 pence is highly attractive and represents a 
best-case scenario for shareholders,” Mr. Gromadin said in a research note.

Imperial shares have risen sharply in recent weeks as investors hoped a 
bidding war would develop after the company said earlier this month that 
it had received a second approach from an identified party.

ONGC Videsh already has a presence in Russia through its 20 percent 
stake in the Exxon Mobil-led Sakhalin-1 oil and gas project, which is 
locked in a dispute with the Kremlin.

Moscow is blocking the consortium from exporting gas while Exxon says 
its contract allows the transaction.
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