State-owned Indian Oil Corp (IOC) and its partners are in talks to buy 49 per cent stake in Russia’s Vankor cluster oilfields to consolidate their presence in the energy-rich Arctic region. IOC, Oil India Ltd and Bharat PetroResources Ltd (a unit of Bharat Petroleum Corp. Ltd or BPCL) are looking at buying a stake in Suzunskoye, Tagulskoye and Lodochnoye fields — collectively known as Vankor Cluster, sources privy to the development said. ONGC Videsh Ltd (OVL), the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), is also interested in the fields.
Rosneft, Russia’s national oil company that owns the fields, wants to retain a majority stake and is keen to sell only up to 49 per cent stake. In case OVL is accommodated, the entire 49 per cent stake would have to be split between the Indian companies. OVL may possibly take 26 per cent in the proportion of the stake it bought in the main Vankor oilfield. OIL-IOC-BPRL may take 23.9 per cent stake in line with its holding in the main Vankor field.
Vankorneft, a subsidiary of Rosneft, is developing the Vankor oil and gas condensate field, situated in the northern part of Eastern Siberia. In 2013, Vankorneft was chosen as an operator on the development of new fields of Vankor cluster — Suzunskoye, Tagulskoye and Lodochnoye fields, located close to the Vankor field. The reserves of Suzunskoye field exceed 56 million tonnes of oil and condensate, and 35 billion cubic meters of gas.
Last year, OVL first acquired 15 per cent stake in Russia’s second biggest oilfield of Vankor for #1.268 billion and then bought another 11 per cent for $930 million. The 26 per cent stake would give OVL 7.31 million tonnes of oil. The consortium of OIL-IOC-BPRL acquired 23.9 per cent stake in the field at a cost of $2.02 billion, giving them 6.56 million tonnes of oil. Rosneft continues to hold the remaining 50.1 per cent shares of JSC Vankorneft. The field has recoverable reserves of 2.5 billion barrels.
Besides, the OIL-IOC-BPRL consortium has taken another 29.9 per cent stake in a separate Taas-Yuryakh oilfield in East Siberia for $1.12 billion. The investments have taken the total outlay in Russia this year to $5.46 billion. These investments will give India 15.18 million tonnes of oil equivalent.
The investment made compares to $28.48 billion investment by Indian companies overseas in the past 50 years, giving it about 10 million tonnes of oil equivalent. While Vankor produces about 442,000 barrels of oil per day (4 per cent of Russian crude oil production), Taas currently produces about 21,000 barrels per day of oil, and a peak of 1,00,000 bpd is expected by 2021.