Economic Times: ONGC Videsh Betting on Imperial Energy's Shale Reserves

ONGC Videsh (OVL), the overseas arm of the state-run explorer Oil and Natural Gas Corporation, does not plan to get out of the Imperial Energy fields in Russia anytime soon despite declining output, $400 million write-down and withdrawal of sanction-hit oilfield services firms delaying exploration, its managing director said.

A sharply lower than expected output clouded the prospects at the Russian fields operated by Imperial Energy, a fully-owned subsidiary of OVL, setting off speculation that the Indian parent might just exit the asset. Questions have also been raised about the $1.9 billion buyout of Imperial Energy in 2008 when oil prices were more than double the current level.

However, OVL is betting on striking gold in Imperial's shale reserves in Bazhenov, Russia and getting a larger share in the potential profits after Russian government reduced taxes.

"It's huge. It's about 13,000 sq km. We will continue to work on this," managing director Narendra Kumar Verma said, referring to the attraction of the shale reserves in Bazhenov and the potential profit it can generate if OVL gets it right. "Let's see if we can survive."  MORE