India to acquire stake in Russian oil fields, to invest US $3.2 billion

india-oilIndian government approved the acquisition of stakes in two Russian oil fields for US $3.2 billion.

A consortium of Oil India Limited, Indian Oil Corporation Limited and Bharat Petro Resources Limited (BPRL) will acquire 23.9 percent stake in JSC Vankorneft and 29.9 percent stake in LLC Taas-Yuryakh from Rosneft Oil Company, the National Oil Company of Russian Federation.

The acquisition of stake in Vankorneft will provide output of 6.56 million metric ton of oil equivalent per year and the other deal will provide 0.5 MMTOE initially and 1.5 MMTOE by 2019, the government said.

The acquisition is in line with India’s stated objective of adding high quality international assets to its Exploration & Production portfolio and thereby augmenting India’s energy security, said the government.

The acquisition will add 8.06 MMTOE to India’s overseas oil and gas asset. India consumer about 130 MMTOE per year, 80% of which is imported.

The consortium will be paying US $ 2.02 billion for acquiring stake in Vankorneft and US $ 1.24 billion for acquiring stake in Taas-Yuryakh.

Earlier in May 2016 ONGC Videsh Ltd (OVL) completed the formalities of acquiring 15% stake in Vankorneft at the cost of US $1.284 billion which gave OVL 4.11 Million Metric Ton.

It will also provide an opportunity to Indian public sector Oil and Gas companies to absorb newer technologies with Rosneft and British Petroleum (BP). BP acquired 20% stake in Taas-Yuryakh from Rosneft last year.