Rosneft Sells Stake in Vankorneft to Consortium of Indian Energy Companies
Russian state owned Rosneft has signed a sale-purchase agreement with a consortium of Indian companies to sell 23.9 percent stake in its subsidiary, 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. The document was signed in the presence of the Minister of Energy of Russia Alexander Novak and the Minister of petroleum and natural gas of India Dharmendra Pradhan by Rosneft Chief Executive Officer Igor Sechin, Oil India Limited Director Biswajit Roy, Indian Oil Corporation Chairman B Ashok, and Bharat PetroResources Managing Director D Rajkumar.
On March 16, 2016 Rosneft and the Indian consortium signed a heads of agreement in respect to the acquisition. The closing of the transaction will be performed upon obtaining the necessary regulatory and additional approvals, Rosneft said in a statement published Friday.
Last month, Rosneft closed the $1.27 billion deal to sell 15 percent stake in Vankorneft to Indian state owned firm ONGC Videsh (OVL). Although exact value of the deal was was disclosed, based on the OVL deal, the current deal is expected to be valued at over $2 billion.
“The implementation of the signed agreements together with the earlier closed transaction for the purchase of a 15 percent share in Vankorneft by ONGC Videsh Limited subsidiary will allow creating a unique consortium on the basis of the Vankor project,” Rosneft stated.
The Russian firm beleives creation of an international energy hub will significantly amplify the production potential of the Vankor cluster. The potential organization of joint trade operations will allow solidifying positions of Russian energy resources in a highly competitive environment of the Asia Pacific region and will have a positive effect on the stabilization of the market, the company said.
Commenting on the signed documents Igor Sechin said: “The vertically integrated model to be created based on a leading upstream asset in Russia marks a new page in the energy dialogue between Russia and India”.
Vankorneft is a 100-percent subsidiary of Rosneft, and Vankor is the largest oil and gas field discovered in Russia in the past 25 years. The field is located in the North of Eastern Siberia. Plans are in place to produce about 500 million tonnes of oil and about 182 billion cubic metres of gas jointly by the Russian and Indian sides at this field alone.
As on January 1, 2016 Vankor field 2P reserves by PRMS classification are 265 mln tonne of oil and condensate and 88 bcm of gas, according to Rosneft website.