ONGC to merge Russian assets with Bashneft, RussNeft

The cabinet has approved a merger of Oil and Natural Gas Corp's (ONGC) Russian assets with Bashneft and RussNeft in a deal that will give the state-run explorer a 25% stake in the combined entity and access to one of the biggest discovered oilfields in Russia, the Economic Times reported.

ONGC has long been eyeing Bashneft as well as an involvement in the Arctic fields Trebs and Titov that the Sistema subsidiary acquired last year from the Russian state.

The merger will give ONGC a quarter share in the Russian firm's annual oil production of 25 million tonnes besides partnerships in their refineries totaling 20 million tonnes capacity, the newspaper said on Monday without revealing how it got the information.

Indian Oil Corp may also join ONGC in the venture, the paper said, citing officials in the oil ministry.

ONGC and Indian Oil could not immediately be reached for comment.

ONGC already has a stake in Russia's Sakhalin-1 oil and gas project in the Pacific, and in 2008 it acquired the Imperial Energy oil company in western Siberia.

Last December, the Russian oil-to-telecoms holding firm Sistema and ONGC signed a non-binding agreement to consider assets swaps and joint tapping of Russia's energy deposits.