Indian oil firms sign $4.2 Billion deals with Rosneft
Posted on: 17 Mar 2016 18:15:19
17 March 2016 Current Affairs: India's public sector oil companies led by Oil and Natural Gas Corporation's (ONGC) foreign arm ONGC Videsh Limited (OVL) on Wednesday inked pacts to buy stakes in two lucrative Russian oilfields in Siberia for an estimated $4.2 billion (around Rs 28,253 crore).Russia's national oil company Rosneft, which needs to pay off debts incurred in its $55-billion acquisition of TNK-BP in 2013, is selling almost half of its most promising assets to Indian firms in the deal.Under the agreements, OVL will increase its stake in Rosneft's Vankor project to 26 per cent while Oil India Limited (Oil), Indian Oil Limited (IOL) and Bharat Petroresources will buy up to 23.9 percent between them in the same field.Vankor has recoverable reserves of 2.5 billion barrels. Indian public sector oil companies are expected to get access to about 12 million tonnes of oil a year once they complete acquisition of the 49.9-per cent stake of Rosneft, the world's top listed oil producer by output.The agreements were signed in the presence of petroleum minister Dharmendra Pradhan on the second day of Rosneft chief executive officer Igor Sechin's two-day visit to India.Once the deals go through, Rosneft will retain 50.1-per cent stake in Vankor while Indian companies will hold 49.9 per cent. Acquisition is subject to relevant Board, government and regulatory approvals and expected to close by September 2016.Rosneft holds 80 per cent shares while BP PLC (UK) holds 20 per cent in TYNGD through their respective subsidiaries. TYNGD produced 20,000 barrels of oil per day (bopd) with expected peak production of 100,000 bopd by 2021.Rosneft also said it had made progress in talks with Essar Oil Ltd towards a deal to buy a 49% stake in the Indian company and an announcement is likely by June. Essar Oil operates the country’s second biggest private sector oil refinery at Vadinar in Gujarat.
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