ONGC Videsh, Indian Oil, Oil India in talks to buy Rosneft’s Vankor-Cluster stake

By: | Updated: September 28, 2016 8:22 AM

A preliminary agreement between the Indian firms and Rosneft is likely to be signed when Russian President Vladimir Putin visits India in October to attend the BRICS summit.

India’s public-sector hydrocarbon companies, namely ONGC Videsh (OVL), Indian Oil (IOC), Oil India (OIL) and Bharat PetroResources (BPRL), are in advanced talks to acquire up to 49.9% stake in Rosneft's Vankor-Cluster asset in east Siberia, a top official of one of the Indian firms told FE. (PTI)India’s public-sector hydrocarbon companies, namely ONGC Videsh (OVL), Indian Oil (IOC), Oil India (OIL) and Bharat PetroResources (BPRL), are in advanced talks to acquire up to 49.9% stake in Rosneft’s Vankor-Cluster asset in east Siberia, a top official of one of the Indian firms told FE. (PTI)

India’s public-sector hydrocarbon companies, namely ONGC Videsh (OVL), Indian Oil (IOC), Oil India (OIL) and Bharat PetroResources (BPRL), are in advanced talks to acquire up to 49.9% stake in Rosneft’s Vankor-Cluster asset in east Siberia, a top official of one of the Indian firms told FE.

A preliminary agreement between the Indian firms and Rosneft is likely to be signed when Russian President Vladimir Putin visits India in October to attend the BRICS summit.

“The latest deal would be in the same pattern as the recently concluded deals inked between these Indian firms and Russia’s energy behemoth Rosneft,” the official added.

New Delhi’s interest in increasing economic cooperation with Kremlin was reflected in several rounds of talks between Prime Minister Narendra Modi and Putin.

Indian public-sector companies had struck deals to buy equity stakes worth about $5.3 billion with Rosneft since September, 2015. OVL has picked up 26% stake in Vankor field in two transactions, while a consortium of OIL-IOC-BRPL acquired another 23.9% in the same asset, taking the total stake of Indian firms in the prolific asset to to 49.9%. In a separate transaction, the IOC-OIL-BPRL combine picked up 29.9% in Taas-Yuryakh project.

The official said the imminent deal for the Vankor-Cluster asset would also for a 49.9% stake as in the case of the Vankor asset. The reserves and value of the deal are not known. Industry watchers say that a near-50% deal would be worth more than a couple of billion dollars.

Wood Mackenzie, a global energy research and consultancy group, suggested a fair value of $5.9 billion for a 49.9% stake in Vankor and $1.4 billion for a 29% stake in Taas-Yuryakh. This means the deals concluded by India firms were at a 30% discount to Wood Mackenzie valuations.

The Vankor-Cluster, also known as satellite field, has “huge-potential”, said another official, adding that the Vankor-Cluster comprise both producing and under-development fields.

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