Indian Oil Corp, Oil India eye stake in Rosneft’s Vankor-Cluster assets; deal may be inked in Oct

By: | Published: September 3, 2016 6:28 AM

India’s public-sector hydrocarbon companies including Indian Oil Corporation (IOC) and Oil India (OIL) are in fresh talks with Russia’s state-run Rosneft to buy into its Vankor-Cluster asset

IOCL-Re-LIndia’s public-sector hydrocarbon companies including Indian Oil Corporation (IOC) and Oil India (OIL) are in fresh talks with Russia’s state-run Rosneft to buy into its Vankor-Cluster asset, two sources told FE. (Reuters)

India’s public-sector hydrocarbon companies including Indian Oil Corporation (IOC) and Oil India (OIL) are in fresh talks with Russia’s state-run Rosneft to buy into its Vankor-Cluster asset, two sources told FE.

Though the talks are in early stages and the parties are yet to arrive at a transaction value or even the quantum of equity to be transferred to the Indian firms, a preliminary agreement was likely when Russian President Vladimir Putin visits India in October to take part in the BRICS summit, one of them said.

New Delhi’s interest in increasing economic cooperation with Kremlin was reflected in several rounds of talks between Prime Minister Narendra Modi and Putin. After Modi stepped into South Block, Indian public sector companies entered into agreements to buy equity stakes worth about $4.4 billion with Rosneft. Another deal for around $900 million is in the final stages for ONGC Videsh (OVL) to up its stake in Vankor field from 15% to 26%. OVL had bought 15% in the asset for $1.27 billion in September, 2015.

The Vankor-Cluster, also known as satellite field, has “huge-potential”, said the second official, without divulging the reserves citing confidentiality clauses between the companies.

The consortium of OIL-IOC-BRPL acquired 23.9% in Vankor for a little over $2 billion in June 2016. This took the stake of Indian firms at the Vankor asset to 49.9%. In addition, the IOC-OIL-BPRL combine picked up 29.9% in Taas-Yuryakh for $1.1 billion in the same month.

“The diplomatic relations with Russia has reached such heights that it will ensure India’s energy security for a long term,” petroleum minister Dharmendra Pradhan had said. “Indian companies are investing in various oil projects in Russia and the investments are expected to reach $5 billion to $6 billion,” the minister added.

State-controlled Rosneft is the world’s top listed oil producer by output. Currently, the Taas-Yuryakh asset is producing 20,000 barrels of oil per day (bopd) with expected peak production of 100,000 bopd by 2021. The Vankor oilfield in East Siberia produces more than 4,42,000 bopd, double the output of Barmer, India’s largest onshore field, which is operated by Cairn India.

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