Indian PSUs Consortium Purchases Roseneft Stake in around $4.2 billion

Indian consortium of PSUs led by ONGC Videsh along with IOC, Oil India and subsidiary of Bharat Petroleum Corporation, Bharat Petro Resources has signed an agreement to purchase 49.9% stake in Tass-Yuryakh oilfield from Rosneft.  The deals were signed during a visit of Rosneft’s President and Chairman Igor Ivanovich Sechin and together worth around $4.2 billion. The field currently produces 20,000 barrels of oil per day (bopd) with peak production of 100,000 bopd expected by 2021. Before the signing off Minister of State (I/C) for Petroleum and Natural Gas, Dharmendra Pradhan held a bilateral meeting with Sechin.

There were three agreements that have been signed, which include share purchase agreement (SPA) between the consortium of Indian companies (Oil India Ltd, Indian Oil Corporation and Bharat Petro Resources Ltd) and Rosneft of Russia on acquiring 29.9 % share in Taas-Yuryakh by the consortium, heads of agreements, between the consortium of Indian companies (Oil India Ltd, Indian Oil Corporation and Bharat Petro Resources Ltd) and Rosneft of Russia on acquiring of  23.9% share by the consortium in Vankorneft, memorandum of Understanding between ONGC Videsh Ltd. (OVL) and Rosneft of Russia regarding acquiring of 11% share in Vankorneft in addition to earlier 15% share by OVL and  memorandum of understanding between consortium of Indian companies (Oil India Ltd, Indian Oil Corporation and Bharat Petro Resources Ltd) and Rosneft of Russia for acquisition in Vankor cluster. Importantly OVL acquired 15% of Vankor for $1.26 billion in September last year.

These agreements will boost the energy security need of India in future and give Indian Consortium 49.9% holding in the Vankor oil field managed by Rosneft subsidiary Vankorneft. As per estimates, the field produced 22 million tonnes of oil in 2014, equal to about a 10th of Rosneft’s total output.