ONGC Videsh, Indian Oil, Oil India to ink $2-bn deals with Rosneft

State-run oil companies including ONGC Videsh (OVL), Indian Oil Corporation (IOC), Oil India (OIL) and

Bharat PetroResources (BPRL) are set to clinch deals worth $2 billion with Russia’s Rosneft on

Wednesday for acquiring hydrocarbon assets. Rosneft’s chief executive Igor Sechin will arrive in New

Delhi Tuesday afternoon for this purpose.

In one of the deals, IOC, OIL and BPRL would acquire up to 30% stake in the Taas-Yuryakh oil and gas

fields in East Siberia, an official privy to the development told FE.

Also, OVL would hike its stake up to 26% from current 15% in the Vankor oil field. Both these deals

together would cost the Indian explorers close to $2 billion.

On December 9, 2015, FE was first to report IOC and OIL negotiating to pick up stakes in Rosneft’s

asset.

New Delhi’s interest in increasing economic co-operation with Kremlin is seen as an extension of

several rounds of talks between Prime Minister Narendra Modi and Russian President Vladimir Putin

held in New Delhi and overseas.

“The memorandums of understanding (MoUs) are already in place. The final agreements based on

terms agreeable to both sides are to be decided. We hope to reach an agreement,” said another

senior government official.

The move comes after another OVL, in September 2015, announced buying 15% stake in Vankorneft

(that runs the Vankor oil field in East Siberia) from the Russian firm for $1.25 billion.

The Taas-Yuryakh oil and gas field is rich in gas with presence of oil layers. Currently, crude oil

production hovers around 20,000 barrels per day (bpd). The field’s reserves under Taas-Yuryakh

Neftegazodobycha areas have total 167 million tonnes of liquid hydrocarbons and 181 billion cubic

metres of gas. There are proposed programme for the development of the field that would reach the

level of 5 million tonnes annually. In 2014, production of oil and gas condensate reached 1 million

tonnes. Currently, oil produced by Taas-Yuryakh is being marketed to Asian customers via the the

Eastern Siberia–Pacific Ocean oil (ESPO) pipeline.

“Rosneft plans to select a second partner in Taas-Yuryakh Neftegazodobycha, which will have positive

effect on the project’s development in the long term,” Rosneft spokesperson earlier told FE.

On June 19, Rosneft and BP signed final bidding agreements for a joint venture for the Taas-Yuryakh

project, where the Russian explorer would sell 20% stake to the UK firm for $700 million.

Since Russian President Vladimir Putin came to power in 1999, he has used development of the

nation’s oil and gas wealth to rebuild after the economic collapse of the 1990s, said Bloomberg in a

NGS INDIA