IOCL, OIL and Bharat PetroResources buys 24% stake in Russian oilfield

An Indian consortium, led by Indian Oil Corporation Limited (IOCL), Oil India Limited (OIL) and Bharat PetroResources Limited (a wholly owned subsidiary of Bharat Petroleum Corporation Limited), signed the definitive agreement to acquire up to 23.9 percent stake from Rosneft Oil Company of Russia in JSC Vankorneft, which is the owner of Vankor and North Vankor Field licences. The acquisition is subject to relevant board, government and regulatory approvals and is expected to close by September 2016.
 
The agreement was signed on June 17, 2016 during the St. Petersburg International Economic Forum (SPIEF) held in St. Petersburg in the presence of Dharmendra Pradhan, Minister of State for Petroleum and Natural Gas and Alexander Novak, Russia’s Energy Minister, by B Ashok, chairman, Indian Oil Corporation; Biswajit Roy, director (HR & BD), OIL; D Rajkumar, managing director, Bharat PetroResources; and Igor Sechin, president, chairman of the management board, vice-chairman of board of directors of Rosneft.
   
At present, Rosneft Oil Company holds 85 percent stake while ONGC Videsh Ltd (through its subsidiary) holds the remaining stake in JSC Vankorneft. Vankor field, located in East Siberia, is Russia’s second largest field by production and accounts for around 4 percent of Russian production and currently produces oil at a level of approximately 422,000 barrel oil per day (bopd). It is the largest of the fields, discovered and commissioned in Russia during the last twenty five years and is located in the North of Eastern Siberia in Turukhansk District of the Krasnoyarsk Territory 142 km away from Igarka town.
 
The recoverable resources of the Vankor field as of January 1, 2016 stood at 361 million tonnes of oil and condensate and 138 bcm of gas. With the closure of the Vankor deal, IOCL’s equity oil portfolio will go up by 1.6 MMT per annum.
 
Dharmendra Pradhan said, “The agreement will further strengthen the long-standing relationship between Indian PSUs and Rosneft, paving the way for an enriching journey together. The acquisitions also have significant strategic importance to India, both in terms of augmenting India’s energy security as well as enhancing India’s stature in the global political and economic arenas.”