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India set to buy 49% in Russia oilfield by Feb

OVL-led consortium to pick stake in Vankor cluster

Shine Jacob  |  New Delhi 

ONGC
ONGC

A consortium of Indian led by Videsh (OVL) is likely to acquire a 49 per cent stake in Russia’s Vankor cluster oilfields owned by Rosneft by February 2018.

While OVL, a fully-owned subsidiary of state-run Oil and Natural Gas Corporation, is expected to hold 26 per cent stake in the cluster, remaining players — Indian Oil Corporation (IOC), (OIL), Hindustan Petroleum Corporation (HPCL) and Bharat PetroResources (BPRL) — will also be partners in it.

is heading the talks for the consortium. We are expecting to seal the deal by February next year,” said an official. The Vankor cluster includes three fields — Suzunskoye, Tagulskoye and Lodochnoye — in the north of the Krasnoyarsk territory in immediate neighbourhood of the
 
“The size of the deal is likely to be close to $1 billion. We are already in the advanced stage of talks,” he added.

Another official privy to the deal said, “We are in the stage of technical due-diligence. Financial due-diligence is yet to happen. Hence, the value of the (Vankor cluster) deal cannot be specified now.”

Last year, Indian bought a 49.9 per cent stake in the for $4.2 billion. It is the second largest field by production in Russia, which accounts for 4 per cent of the country’s total oil produce. Rosneft continues to hold 50.1 per cent stake in the block. Later, IOC, OIL and BPRL acquired 29.9 per cent stake in Taas-Yuryakh oil field in East Siberia for $1.12 billion, taking the overall investments in Russian oil and gas industry last year to $5.46 billion. While Vankor produces about 442,000 barrels of oil per day (bpd), Taas produces about 21,000 bpd.

has recorded a 43 per cent increase in production to 12.8 million tonne of oil equivalent (MTOE) in 2016-17, compared to 8.9 MTOE in 2015-16. “The increase in our production figures is mainly owing to the acquisition of stake in Vankor. In FY18, we are expecting Vankor to contribute about 79 per cent of our overall production, at around 6.3 MTOE,” had stated after its second quarter results this year.

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In the past three years, pushed by the Russian acquisitions, India has earned oil and gas assets to the tune of 15.8 MTOE abroad.

“In Vankor, we had acquired 26 per cent by paying $2 billion. The acquisition cost came to as low as $3.5 per barrel, making it one of the most economically attractive deals for OVL,” said an official.

According to a Rosneft statement issued last year, a total of 88 wells were put into commercial production in the Vankor cluster, including 57 production wells, 27 intake wells and four water supply wells. “This year RN-Vankor plans to increase its drilling rate. Production drilling growth is expected to be reached due to the drilling rigs fleet increase and commercial drilling rate enhance at the Suzunskoye, Tagulskoye and Lodochnoye fields,” Rosneft had stated earlier this year.
* OVL is expected to hold 26% stake in the cluster

* Rest by Indian Oil Corp (IOC), (OIL), Hindustan Petroleum Corp (HPCL) and Bharat PetroResources

First Published: Thu, November 09 2017. 00:57 IST
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