ONGC Eyes Stake in Russia's Tagul Field

After successfully closing the deal to buy a 15% stake in Vankorneft for $1.27 billion, India’s leading state owned energy firm ONGC is looking to further expand its footprint in Russia.

According to a report by Sputnik, ONGC Videsh Ltd. (OVL), the overseas arm of ONGC, is interested in acquiring a 49% stake in Rosneft’s Tagul oil and gas field. The deal is likely to be formalised by the fourth quarter of this year.

Source have told Sputnik that the value of the deal could be around $1 billion and the Indian firm would need to share the cost of developing the field since Tagul is not operational yet. According to Rosneft, Tagul has 286 million tonnes (MT) of oil and condensate, and 228 billion cubic. metres of gas as recoverable reserves.

ONGC is not the only state owned firm that has set eyes on Russian energy assets. Earlier this year, Rosneft signed a sale-purchase agreement with a consortium of Indian government owned companies to sell 23.9% stake in Vankorneft. Companies led by Oil India Limited along with Indian Oil Corporation Ltd. and Bharat PetroResources signed the agreement at the St. Petersburg International Economic Forum.

New Delhi has been extremely proactive in deepening energy ties with Moscow. Indian oil minister Dharmendra Pradhan visited St Petersburg from June 16-17, 2016 where he held talks with leading Russian energy firms. Pradhan met with and talked energy cooperation with CEOs of Rosneft, Novatek and Gazprom. The minister briefed these companies on government’s recent policy announcements and investment opportunities in the hydrocarbon sector, including on the Hydrocarbon Exploration and Licensing Policy (HELP) and Small Discovered fields bidding round.

The minister also met with Alenxander Novak, Russia energy minister. Both ministers discussed the entire gamut of oil and gas relations between India-Russia and expressed satisfaction on the ongoing cooperation between the two countries in the hydrocarbon sector.