 "An oil well is seen near Denver, Colorado. Photo: Reuters")
Essar Oil might be in a spot of trouble with its Russia deal but state-owned Oil and Natural Gas Corporation (ONGC), Indian Oil Corporation (IOC), Bharat Petro Resources (BPRL) and Oil India (OIL), that have bought stakes in Russian oil assets, are not too perturbed by the US and European Union (EU) sanctions.
IndianOil, OIL and BPRL - a unit of Bharat Petroleum Corporation (BPCL) - are together raising $2 billion in debt to fund their purchase of stakes in two Russian fields - Vankorneft and Tas-Yuryakh.
ONGC Videsh, too, has taken a bridge loan of $1.2 billion from a group of foreign banks to fund its acquisition of 15 per cent stake in Russia’s second biggest Vankor oilfield. “We did our risk assessment while acquiring stake and raising money. There is no significant concern. There are some banks that are impacted, still others not. We raised money in Singapore and London,” said a senior executive in one of the companies. He said the Iran sanctions were a bigger concern to Indian companies, since they were purchasing crude from that country.
IOC had found itself in an Essar-like predicament when the US and EU imposed sanctions on Iran. National Iranian Oil Company had 15.4 per cent stake in its subsidiary, Chennai Petroleum Corporation, when the company was set up in 1965. The company could not get additional Iranian equity due to sanctions, when the refinery at Manali came up for expansion. IndianOil, however, managed to pump in Rs 1,000 crore through private placement in the company.
