ONGC Videsh, the overseas arm of state-run ONGC, on Friday announced a plan to pick up a 15 per cent stake in Vankorneft that runs the Vankor oilfield in East Siberia from Russia’s Rosneft for a reported $1.25 billion. The field, which has been under production since August 2009, produces over 4,42,000 barrels of oil per day, double the output at Barmer, India’s largest onshore field operated by Cairn India.
With the deal, OVL’s share would be around 66,000 barrels per day. The deal assumes significance to India as it will bolster the asset base of OVL and the energy-starved country would immediately start getting its share of crude oil to meet the increasing demand at home. Moreover, the acquisition has taken place when global crude oil price has plummeted to a six-year low. The deal is learnt to have been discussed and more or less reached between Prime Minister Narendra Modi and Russian President Vladimir Putin at Ufa in early July.
Though neither party disclosed the deal size, Igor Sechin, CEO of Rosneft, was quoted as saying by Bloomberg that the “deal sets a market price for the asset”. Vankor is Rosneft’s (and Russia’s) second largest field by production and accounts for 4 per cent of Russian production. FE