An Indian Oil Corporation (IOC)-led consortium of state-run oil companies from India will acquire 23.9 percent stake in Russia's Vankor oilfield for $2.1 billion, reported the Press Trust of India. Vankor is the country's largest oilfield, discovered and brought into production in the last 25 years by Russia's national oil company Rosneft.
IOC, Oil India Ltd (OIL) and Bharat PetroResources (a subsidiary of Bharat Petroleum Corp) will pick up nearly 8 percent stake each in the east Siberian field, which at present produces 422,000 barrels of oil per day and contributes 4 percent to Russia's production, said PTI. It added the field was the federation's second largest in terms of oil production.
In a statement, IOC said the consortium "signed the definitive agreement to acquire up to 23.9 percent shares from Rosneft Oil Company in JSC Vankorneft, a company organised under the law of the Russian Federation, which is the owner of Vankor and North Vankor Field licences."
Rosneft currently owns 85 percent majority stake in the field, with the rest held by another Indian oil giant, Oil and Natural Gas Corporation (ONGC)'s foreign arm ONGC Videsh Ltd (OVL).
The consortium said the deal is expected to be finalised by September 2016, after government and regulatory approvals. It will also push India's stake in the field to 38.9 percent in all.
In September 2015, OVL invested $1.25 billion to fork out a 15 percent stake in the same oilfield. As of early January 2016, Vankor field's recoverable resources stood at 361 million tonnes of oil (and condensate) and 138 billion cubic meters of gas. "With the closure of the Vankor deal, IOC's equity oil portfolio will go up by 1.6 million tonnes per annum," said the statement.
It added that the acquisition will be strategic to India both in terms of its energy security as well as its growing geo-political and economic power. India and Russia have sought to increase their bilateral trade to $30 billion by 2025. It stood at $9.51 billion in 2014, according to the Indian Embassy website.
Rosneft has indicated to sell another 11 percent stake in Vankor to OVL; however the details are still to emerge.