Russia's largest oil company Rosneft is close to acquiring a majority stake in Essar Oil Ltd and a final deal is expected to take place this week.
"Both companies are finalizing the term sheet and a deal can be announced any time this week," Livemint quoted a person familiar with the development as saying.
However, the deal size is yet to be disclosed.
The Mumbai-based Essar Group has proposed to sell 49% stake in its oil division Essar Oil, according to the sources at Rosneft.
"There are discussions going on. I cannot comment anything further," said a source close to the Russian oil giant.
According to industry watchers, Essar Oil is looking for a valuation of $8 billion for its business.
In December last year, Rosneft -- the state-owned enterprise of Russia -- had signed an agreement to export 10 million tonnes of crude oil annually to Essar Group for 10 years.
"It is not our policy to comment on market speculations. The company has already informed the Stock Exchanges last week stating that there is no event or development which is required to be submitted to the stock exchanges as per the listing agreement," Essar Oil spokesperson told PTI.
Currently, Essar Oil is operating a major refinery at Vadinar, Gujarat, with a capacity 20 million tonnes per annum. It also runs 1,600 petrol pumps across the country.
The private oil company imports a majority of oil for its refinery from Iran and it is expected to curtail such imports to give way to Russian oil.
Share prices of Essar Oil have witnessed a gain of over 50% in the past one week.