ONGC, Indian Oil and others to Sign deal of $2-bn with Russian Rosneft

Russian oil firm Rosneft has signed a slew of documents with Indian oil firms like ONGC Videsh (OVL), Indian Oil Corporation (IOC), Oil India (OIL) and Bharat PetroResourcces (BPRL) to sell them stakes in Russian oil fields to help them acquiring hydrocarbon assets and thereby improving the bilateral ties between the two countries. These deals together will cost Indian explorers almost $2 billion.

• This deal meant that Rosneft will now be able to clear of a huge debt which was incurred in its $55 billion acquiring of TNK-BP in 2013. It also means that almost half of Rosneft’s asset will be sold to the Indian oil firms.
• According to the agreements announced today, ONGC will increase it stake in Rosneft’s Vankor project to 26% wherein Oil India, Indian Oil and BRPL will be able to buy up to 23.9% stake among them provided the deals are finalized. Vankor is Rosneft’s newest project and it has produced 22 million tonnes of oil in 2014. Vankor’s oil is shipped to Asian countrie, mainly China.
• Rosneft is the world’s leading oil producer by output and if the deals are finalized then the company will retain 50.1% stake in Vankor. In 2015, ONGC agreed to buy 15% stake in Vankor. Oil India, Indian Oil and Bharat Petroresources have also signed a legally binding share sale agreement for 29.9% in ROsneft’s Taas-Yuriakh field as well.

(Source: Reuters)