ONGC advances after OVL signs MoU with Rosneft

ONGC gained 3.15% to Rs 212.95 at 12:14 IST on BSE after the company's overseas investment arm signed a memorandum of understanding with Rosneft for the acquisition of 11% shares in Vankorneft, a wholly owned subsidiary of Rosneft.

The announcement was made during market hours today, 17 March 2016.

Meanwhile, the S&P BSE Sensex was up 149.26 points or 0.6% at 24,831.74

On BSE, so far 2.92 lakh shares were traded in the counter as against average daily volume of 5.93 lakh shares in the past one quarter. The stock hit a high of Rs 213.25 and a low of Rs 208.50 so far during the day. The stock had hit a 52-week high of Rs 343 on 5 May 2015. The stock had hit a 52-week low of Rs 188 on 12 February 2016. The stock had underperformed the market over the past one month till 16 March 2016, gaining 3.54% compared with Sensex's 6.43% rise. The scrip had also underperformed the market in past one quarter, declining 8.87% as against Sensex's 3.18% fall.

The large-cap company has equity capital of Rs 4277.75 crore. Face value per share is Rs 5.

ONGC said that the company's overseas investment arm, ONGC Videsh (OVL) has signed a memorandum of understanding (MoU) with Rosneft for the acquisition of 11% shares in its wholly owned subsidiary, Vankorneft. The MoU also provides for the parties to explore the possibility to conclude long-term crude oil and feedstock supply agreements whereunder Rosneft (or its affiliates) would supply oil to the refineries of OVL (or its affiliates) located in India, ONGC said. The acquisition is in addition to the 15% shares for which the definitive agreements were signed in September 2015, the comnpany said. Thus, OVL would be acquiring 26% shares in Vankorneft. For the purpose of agreement, the parties shall consider using crude oil produced by Rosneft (including Rosneft's share in Vankorneft) as the main stream with its option to substitute the main stream with alternative grades, it added. Vankorneft is wholly owned subsidiary of Rosneft that operates Vankor Field in Russia and was set-up in 2004.

ONGC's net profit fell 64% to Rs 1285.62 crore on 4.6% decline in total income to Rs 19359.57 crore in Q3 December 2015 over Q3 December 2014.

ONGC is India's largest oil and gas exploration firm by sales. The Government of India held 68.93% stake in ONGC (as per the shareholding pattern as on 31 December 2015).

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