ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corp, has completed the acquisition of additional 11 % interest in Russia's Vankor oilfield, taking its total stake to 26%.
The company signed a deal with Rosneft Oil Company to acquire additional 11% stake in the East Siberian field for $930 million on October 28.
"We raised a bridge loan of $930 million from overseas lenders to pay for the acquisition cost of 11% stake," OVL CEO and Managing Director Narendra K Verma said here.
OVL, which had previously bought 15% stake in Vankor from Russian national oil firm Rosneft for $1.268 billion, will get an 7.3 million tons of oil equivalent from its 26% stake.
OVL will tie-up long-term financing in the next six to ninth months to replace the bridge loan, he said.
Besides OVL's 26%, a consortium of comprising Oil India (OIL), Indian Oil Corporation (IOC) and Bharat PetroResources (BPRL) has acquired 23.9% stake in the field at a cost of $2.02 billion, giving them 6.56 million tons of oil.
After the stake sales, Rosneft holds 50.1% stake in JSC Vankorneft, the company that operates the Vankor oilfield.
Verma and Igor Sechin, CEO, Rosneft, had on September 14 in Moscow inked an agreement to take the additional equity stake in Vankor. That agreement was subject to certain conditions including approvals from the Indian and Russian governments.
All approvals are in place, leading to closure of the deal, he said. "The completion within very short period of the binding agreement reflects the speed and cooperation with which both OVL and Rosneft have moved and the support that the investments by Indian companies in Russian oil sector enjoy with the Russian and Indian governments."
Vankor is Rosneft's (and Russia's) second largest field by production and accounts for 4% of the country's production.
The daily production from the field is around 410,000 barrels per day of crude oil and 26% stake would give OVL about 107,000 bpd.
"The acquisition of additional 11% would add about 30 per cent to the existing OVL's production at the current rate and approximately 2.2 million tons of oil and 1.0 billion cubic meters of gas annually," he said.
The field has recoverable reserves of 2.5 billion barrels.
The $2.2 billion OVL spent for acquiring 26% stake in Vankor will be its third biggest acquisition. It had in 2013 paid $4.125 billion for 16% stake in Mozambique's offshore Rovuma Area 1, which holds as much as 75 Trillion cubic feet of gas reserves.
In 2009, it had bought Russia-focused Imperial Energy for $2.1 billion. Prior to that, it had in 2001 paid $1.7 billion for 20% interest in the Sakhalin-1 oil and gas field off Russia's far eastern coast.
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