ONGC acquires 15% stake in Rosneft’s field for $1.268 bn

Tribune News Service

New Delhi, September 4

ONGC is buying 15% stake in Russia’s second biggest oil field of Vankor from Rosneft for $1.268 billion, its fourth biggest acquisition ever.

ONGC Videsh Ltd, the overseas arm of the state explorer, signed an agreement to buy 15% stake in Vankorneft. The field, which has recoverable reserves of 2.5 billion barrels, will give OVL 3.3 million tonne per annum of oil production.

OVL said it “has signed definitive agreements to acquire up to 15% shares in CSJC Vankorneft, a company organised under the law of Russian Federation which is the owner of Vankor Field and North Vankor licence.”

The document was signed by the Chairman of Rosneft Management Board Igor Sechin and Managing Director of ONGC Videsh Limited Narendra Verma.

ONGC Videsh will have two places in the Board of Directors of Vankorneft. Rosneft will create an operator company that will allow more efficient management of both Vankor field and other company’s licences in this region.

The agreements on considering acquisition of minority share in Vankorneft by OVL were reached on July 8 during the meeting between the President of the Russian Federation Vladimir Putin and Prime Minister Narendra Modi in Ufa.

Commenting on the signed document Igor Sechin said: “Collaboration in such a large-scale project will allow establishing a brand new level of strategic cooperation between Rosneft and ONGC Videsh. This will accelerate the development of our partnership, in other large-scale oil and gas upstream projects in the region”.

While both OVL and Rosneft did not give value of the deal, a source privy to the transaction said OVL will pay $1.268 billion.