Rosneft No Longer Interested In Imperial Stake, Sources Say

NEW DELHI, India — Rosneft will not buy a stake in Imperial Energy, which India's state-run ONGC is acquiring, Indian government and ONGC sources said Monday.

"Earlier, [Rosneft] said they wanted to have some stake in Imperial, but now they have said that due to financial meltdown they are not able to arrange funds," an ONGC official said.

An Indian government official confirmed that Rosneft was now not keen on participating. Neither source could be named but both are closely linked to the Imperial purchase.

Rosneft has said in the past that it was not interested in a stake in Imperial but analysts and sources close to Imperial have maintained it was interested.

Company spokesman Nikolai Manvelov on Monday said, "We have never said that we are interested in Imperial Energy."

Rosneft's finance chief recently said he expected a tough fourth quarter and hoped state aid would help it refinance its massive foreign debts.

Oil and Natural Gas Corporation reluctantly went ahead with its high-priced bid for Imperial last week after losing its appeal to delay the process.

It has already made an offer to Imperial shareholders to acquire their holdings at bid price of 1,250 pence.

Imperial management has strongly recommended that shareholders accept the offer "as soon as possible."

Likely returns on ONGC's proposed $2.6 billion investment have considerably declined as crude prices have fallen two-thirds from a peak above $147 a barrel in July.

The Indian government has charged ONGC with securing energy supplies overseas to fuel the country's fast-growing economy, which is showing consistent signs of a slowdown, and Russia is seen as an area of key focus.

The location of Imperial's fields — the majority of its licenses are in the west Siberian region of Tomsk — means that ONGC is unlikely to ship oil from them to India, but its ownership provides a hedge against rising energy costs.