Oil & Natural Gas Corporation Ltd.

State-run ONGC and Russian conglomerate Sistema have decided to merge their oil & gas businesses in Russia under a joint venture in a no-cash deal where the Indian firm will have a 25% shareholding with a say in management.

The merger of three companies, Bashneft, RussNeft and Imperial Energy, will make ONGC a shareholder in the Russian firms’ annual oil production of 25 million tonne and in the output of their refineries which have a capacity of 20 million tonnes besides discovered oil fields, Trebs and Titov.  State-run Indian Oil Corp (IOC), India’s largest refiner, will join ONGC in the venture.

ONGC will merge its wholly-owned subsidiary Imperial Energy into the new company.  ONGC Videsh, the foreign arm of the state-owned giant, India’s second-largest company by market capitalisation, had acquired Imperial in 2008 for $2.1 billion. Imperial produces about 1 million tonnes of crude oil annually and all its assets are in Russia.crackcrack