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By John Helmer in Moscow

The Indian government has until midnight to decide whether to pay a huge premium for undeveloped Siberian oil reserves held by one of the most highly leveraged oil companies in the Russian market. Yesterday, the UK Takeover Panel refused to extend the deal deadline beyond today. The oil is located in the Tomsk region, near the Chinese border, China and Japan have better chances of receiving the crude than India. Imperial Energy Corporation, a London listed company, owns the oilfield development licences, and controls the oil, which is still running at a trickle. In July, Imperial accepted a takeover offer from the Indian state group, Oil & Natural Gas Corporation (ONGC), for GBP1.4 billion ($2.1 billion). Since then, President Dmitry Medvedev and Prime Minister Vladimir Putin have given their approval.

They, however, may be backing Gazprom and Rosneft, both state owned, to buy a control share of Imperial from ONGC, in a second, and hitherto undisclosed transaction. That, it is speculated, is one reason the Indian bid has not been lowered to close the $800 million gap that has opened up between the original bid, and today’s market value of Imperial at $1.3 billion. According to ONGC, it must secure fresh sources of crude oil, outside India, to meet the demand. ONGC also defends its premium offer by forecasting $100 per barrel pricing for oil in future. So far, however, ONGC’s oil import replacement scheme has resulted in equity stakes in Russian assets, without dividends, and not oil that can be loaded on tankers.

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