ONGC Videsh Limited Signed Agreement with Sistema

State-run ONGC Videsh Limited (OVL) on 21 December 2010 inked an agreement with Russia's largest diversified financial corporation Sistema. According to the terms of the agreement ONGC will give up its stake in its Russian unit Imperial Energy completely for acquiring a 25-30 per cent interest in Sistema-owned JSC Bashneft. As per the agreement OVL will also get a part of Sistema's 49 per cent stake in RussNef which has fields in Russia that produce 12 million tonnes of oil as well as a stake in Trebs and Titov fields that Bashneft won recently. Sistema owns over 75 per cent stake in Bashneft and together with persons acting in concert, it controls over 90 per cent.

The agreement also covers any other oil and gas assets which Sistema or Bashneft may acquire before definitive agreements are signed with OVL. OVL in exchange will give away its 100 per cent interest in Imperial Energy. OVL had acquired Imperial Energy which produces little over one million tonnes of crude oil annually for $2.1 billion in 2008. In exchange, OVL will give away its 100 per cent interest in Imperial Energy, which it had, in 2008, acquired for $2.1 billion.