Bolstered by the initial success of its bid to acquire UK-based Imperial Energy, state-owned Oil and Natural Gas Corporation Ltd is planning to list its wholly-owned overseas exploration subsidiary ONGC [Get Quote] Videsh Ltd sometime in 2009.

Money from the listing will be used to repay some of the bridge loans OVL needs to raise to finance the $2.8-billion Imperial Energy acquisition and create "acquisition currency" for the future, sources close to the company said.

For Imperial Energy, which has assets in western Siberia in Russia and north-central Kazakhstan, OVL is raising a bridge loan of around $1 billion from Deutsche Bank. Parent ONGC is extending it another $1.8 billion at a concessional interest rate of 6 per cent.

The Russian government has already approved OVL's bid and the company is awaiting formal approval, after which the process of getting shareholder approval will begin.

The decision to list OVL is partly dictated by the investment norms that parent ONGC must follow and partly to strengthen OVL's balance sheet. ONGC has already exceeded its equity investment limits in joint ventures and would, therefore, need Cabinet approval for further investment in its subsidiaries.

As a navratna company, which means it is allowed a greater degree of autonomy, ONGC can make equity investments in joint ventures and subsidiaries subject to a ceiling of 15 per cent of its net worth in one project of up to Rs 1,000 crore (Rs 10 billion) and within an overall ceiling of 30 per cent of net worth on all projects.

As in March 2008, ONGC had a net worth of Rs 69,954 crore (Rs 699.54 billion), which means the permissible equity investment limit is Rs 21,000 crore (Rs 210 billion). In March 2007 alone, ONGC's exposure in subsidiaries was more than Rs 23,000 crore (Rs 230 billion). The Imperial Energy acquisition will add Rs 7,000-odd crore (Rs 70 billion) to this.

Although it is too early to talk of OVL's valuation, sources said that it would be upward of Rs 75,000 crore (Rs 750 billion).  With imports accounting for more than 75 per cent of demand and oil prices set to rise, OVL's role as an overseas buyer of oil and gas assets is critical to India's economic growth. OVL has 38 oil assets in 18 countries, which include Sudan, Vietnam, Russia, Venezuela and Brazil.

OVL reported a net profit of Rs 6,306 crore (Rs 63.06 billion) on a turnover of Rs 18,954 crore (Rs 189.54 billion).

Sources said one of the options was explored to list in the overseas market. Being registered in India, however, regulations require a domestic float before an overseas one.