Imperial Energy Jumps After Russia Approves Takeover by ONGC

By Stephen Bierman

Nov. 7 (Bloomberg) -- Imperial Energy Plc surged the most in four months in London trading after Russia's antitrust agency approved its 1.4 billion-pound ($2.2 billion) takeover by India's Oil & Natural Gas Corp.

Imperial Energy, the U.K.-based explorer developing deposits in Siberia, rose as much as 25 percent to 1,103 pence. The shares traded at 1,083 pence as of 12:15 p.m. local time.

The acquisition by India's biggest exploration company, known as ONGC, ``has already been approved,'' Sergei Noskovich, a spokesman for the Federal Anti-Monopoly Service, said by telephone from Moscow today. Approval was granted after the country's subsoil agency ruled that Imperial's reserves weren't deemed to be ``strategic.''

``This is a green light for the deal,'' Artem Konchin, a Moscow-based analyst at Aton UniCredit, said in a telephone interview. ``The only major concern now is if the price will remain.''

A slump in energy prices and falling oil output in Russia have hammered shares in the nation's biggest oil companies, OAO Gazprom and OAO Rosneft. Urals crude prices have fallen more than 41 percent since ONCG first made its offer.

ONCG's cash offer of 1,250 pence a share was 61.9 percent more than Imperial Energy's stock price on July 11, the day before it first said it had received a bid.

`Illogical'

``It's illogical on ONGC's part to pay at prices set three months ago when oil was so high,'' UBS AG oil analyst Dmitry Loukashov said by telephone in Moscow today.

ONGC doesn't have any official information as of yet, Chairman R.S. Sharma said by telephone today. Imperial Energy Chairman Peter Levine couldn't be reached for comment.

Today's ruling from the antitrust service follows talks between India's Oil Minister Murli Deora and Russian Prime Minister Vladimir Putin earlier this week.

ONGC agreed Aug. 26 to buy Imperial Energy in what would be its biggest acquisition overseas to tap Siberian deposits and make up for dwindling output at home.

Imperial had a total of 920 million barrels of oil equivalent of proven and probable reserves as of December 2007, according to an audit by DeGolyer and MacNaughton cited on Imperial Energy's Web site.

The U.K. explorer reported a ``major new discovery'' at its Tomsk regional Kiev Eganskoye field in July.

ONGC declined 3.7 rupees, or 0.5 percent, to 740 rupees in Mumbai today, after earlier gaining as much as 5.7 percent. The stock has lost 40 percent so far this year.

India wants to participate in the offshore Sakhalin-3 project in Russia's Far East and form a venture with OAO Rosneft to explore eastern Siberia, the Indian government said earlier this week. In return, India would consider partnership with Russian companies in Indian exploration.

To contact the reporter on this story: Stephen Bierman in Moscow sbierman1@bloomberg.net.