ONGC Videsh plans to raise $1 bn via dollar bonds issue

"We are planning a dollar bonds issue in first quarter of 2013," a top source said.

"Ultimately, what we raise will depend on a lot of factors, but yes we are looking at raising around USD 1 billion."

OVL had in its biggest purchase since acquiring Russia- focused Imperial Energy, in September announced buying US energy firm Hess Corp's stake in Azeri, Chirag and Guneshli (AGC) group of oil fields in the Central Asian nation for USD 1 billion.

The company, which gets most of its funds from its parent firm, has already appointed merchant bankers for raising the debt, the source said.

"There is no doubt that dollar debt is cheaper than rupee borrowings," he said.

OVL in September agreed to buy Hess Corp's 2.7213 per cent participating interest in the Azeri, Chirag and the deepwater portion of Guneshli fields in the Azerbaijan sector of the Caspian Sea and 2.36 per cent interest in the Baku-Tbilisi-Ceyhan (BTC) pipeline for USD 1 billion.

"The debt we are planning to raise will to fund this acquisition. The acquisition is expected to close by the first quarter of 2013 and that's when we are planning the borrowing," he said.

The Azerbaijan acquisition was OVL's biggest since 2009 when it bought UK-listed Imperial Energy Plc for USD 2.1 billion.

ACG, which is located in the

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