ONGC Videsh Ltd., the overseas exploration arm of India's state-owned Oil & Natural Gas Corp., is screening international bankers to help it raise more than $1 billion in external commercial loans for investments in Russia.
The company needs the funds to acquire oil fields in Russia and to buy equity stakes in that country's national oil companies that have been singled out for disinvestment-notably Lukoil and Rosneft. To fund these ventures, the ONGC subsidiary plans to raise term loans overseas, spread over the coming 10 years. An international investment banker is to be selected to help raise these funds and assess property in Russia.
ONGC Videsh is particularly interested in six oil fields in the Russian oblast of Udmort, which will require $59 million worth of investments over the next 5 years. The Russian government will call for bids for both Lukoil and Rosneft, but ONGC Videsh will not have to go through the competitive bid process, thanks to amicable relations between the two countries. During the recent Indo-Russian joint commission meeting in Moscow, ONGC Videsh was told it would be allowed to negotiate equity stakes in the two giant Russian oil firms.
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