Indian OVL Completes Vankorneft Deal

Indian ONGC Videsh has completed the acquisition of 11% additional interest in Vankorneft, a subsidiary of Russian Rosneft, which operates Vankor field in eastern Siberia. The deal was closed October 28, OVL said October 31.

The deal was recently green lighted by Indian cabinet. OVL, which is the overseas arm of state owned ONGC, will be paying $930mn for the stake which will provide 3.2mn metric tons of oil equivalent to OVL by 2017.

OVL now holds 26% stake in Vankorneft while 23.9% equity is held by the Indian consortium of three other state owned firms, Oil India, Indian Oil Corporation and Bharat Petro Resources. Rosneft continues to hold the remaining 50.1% shares of Vankorneft.

OVL and Rosneft teams (Credit: OVL)

Earlier in May OVL had completed the acquisition of 15% equity in Vankorneft, for $1.268bn.

Rosneft subsidiary Vankorneft was established in 2004 to develop Vankor oil and gas condensate field - the largest of the fields, discovered and commissioned in Russia during the last twenty five years. As of Januray 1, 2016, Vankor field 2P reserves by PRMS classification are 265mn tons of oil and condensate and 88bn m³ of gas.

With US and EU sanctions in place, Moscow is looking to expand energy exports in fast growing Asian economies such as China and India, but also with Indonesia. Rosneft and Indonesian state Pertamina agreed in May 2016 a co-operation deal that may lead to a Russian investment in a refinery in eastern Java; and to Pertamina becoming an equity holder in some of Rosneft's upstream interests in Russia.

Shardul Sharma