India's Largest PSUs ONGC buys 15% stake in Russia's 2nd-largest oil field from Rosneft

Highlights:

  • India's largest PSUs Oil and Natural Gas Corporation (ONGC) has bought a 15% stake in Russia's second-largest oil field Vankor from Rosneft for about 1.35 billion US dollars.
  • ONGC Videsh Ltd (OVL) the overseas investment arm of ONGC has signed agreements to buy 15 % stake in the Vankor oil field located in East Siberia.
  • The agreement to buy stake in Vankor was signed by the OVL Managing Director Narendra Verma and Chairman of Rosneft Management Board Igor Sechin in Vladivostok.
  • Under the terms of the agreement OVL will get two seats on the Board of Directors of Vankor, a subsidiary of Rosneft that operates the Vankor field.
  • The 15 % stake Vankor oil field will give OVL about 3.5 million metric tonnes of oil a year of its total 2.5 billion recoverable reserves barrels (or 500 million tonnes).
  • Rosneft will retain full control of infrastructure of the Vankor cluster.
  • Presently, Rosneft (Russian national oil company) holds 100 per cent stake in Vankor which started production in 2009.
  • With this stake acquisition Rosneft, stake will come down to 85%.
  • The stake acquisition is subject to relevant board, Russian government and Regulatory approvals and is expected to be completed by mid-2016.
  • This is fourth biggest acquisition by OVL. It already has a 20 per cent stake in the Sakhalin-1 oil and gas field located off Russia's far eastern coast and also owns Imperial Energy which has fields in Siberia.