Russian energy giant Rosneft OJSC has agreed to sell substantial stakes in two Siberian oil and gas fields to state-run Indian oil companies, advancing India’s efforts to safeguard its energy security through the acquisition of overseas assets. The deals, signed during a visit to India by Rosneft’s president and chairman Igor Ivanovich Sechin, are together worth an estimated $4.2 billion.
- Indian Oil Corp. Ltd, Oil India Ltd and a unit of Bharat Petroleum Corp. Ltd signed an agreement to purchase a 29.9% stake in Tass-Yuryakh oilfield from Rosneft.
- The Indian consortium also signed an agreement with Rosneft for buying a 23.9% stake in the Vankor oilfield, worth just over $2 billion.
- ONGC Videsh Ltd (OVL), the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), signed a separate agreement to buy an additional 11% stake in the Vankor field.
- OVL will pay $925 million for the additional stake, taking its holding in the asset to 26%. In September, OVL acquired 15% of Vankor for $1.26 billion.
- A fourth deal signed will allow Oil India, Indian Oil and Bharat PetroResources Ltd, the Bharat Petroleum subsidiary, to make more acquisitions in the Vankor cluster.
Western sanctions against Russia for its annexation of Crimea in 2014 and a glut in international oil markets that have caused crude prices to slump have made the valuations of the Siberian assets attractive for India, which has been striving to protect its energy security by acquiring assets overseas in competition with China.
The agreements were signed in the presence of oil minister Dharmendra Pradhan, Russian ambassador to India Alexander Kadakin and officials from the companies.
Separately, Rosneft also said it had made progress in talks with Essar Oil Ltd towards a deal to buy a 49% stake in the Indian company and an announcement is likely by June. Essar Oil operates the country’s second biggest private sector oil refinery at Vadinar in Gujarat.
