Russian nod to ONGC's 15% stake in Vankor oilfield

ONGC Videsh has signed a proposal to acquire 15% stake in Vankor oilfield, considered a vital source of Russian oil to China The Dollar Business Bureau

A file-photo of an oil production platform at the Sakhalin oil gas project in Russia

ONGC Videsh has signed a proposal to acquire 15% stake in Vankor oilfield, considered a vital source of Russian oil to China, for $1.3 billion. The oilfield located in east Siberia, started commercial production in 2009, with reserves of 500 mn tonnes of crude oil and 182 bn cubic meters of gas, and produces 440,000 barrels a day. The field discovered in 1988, is the largest field in Russia and key provider of volumes to the East Siberia Pacific Ocean (ESPO) Pipeline. Vankorneft was setup in 2004 as a wholly-owned subsidiary of Rosneft to operate the Vankor field. Rosneft is the leader of Russia’s petroleum industry and the world’s largest publicly traded petroleum company. In addition to Vankor, Vankorneft also owns the Severo (North) Vankor field licenses. The validity of these licenses has been extended till 2112. ONGC Videsh is a wholly owned subsidiary of the state-owned Oil Natural Gas Company Ltd (ONGC) that serves as India’s largest oil, gas exploration and production company outside India. It contributes nearly 15% of oil and 12.5% of oil and natural gas production through its participating interests in 36 oil and gas assets across 17 countries. A partnership with Rosneft commenced in 2001 when ONGC Videsh acquired a 20% stake in Sakhalin -I oil and gas project in the Russian Federation. As per a release made available on ONGC website, ONGC Videsh would be acquiring a total of 26% shares in Vankorneft, thanks to an earlier MoU for a potential acquisition of 11% shares with Vankorneft. While news agency Interfax confirmed the development, it can also be inferred from release available on ONGC Videsh’s website as well as pictures available on the twitter account of the Russian Embassy in New Delhi. The embassy has posted images of a signing ceremony held on 16^th March 2016 at New Delhi and officials from the petroleum ministry discussing and signing strategic deals. An agreement to the latest acquisition was inked by Rosneft’s CEO Igor Sechin's two-day visit to India. Dharmendra Pradhan, MoS (Independent Charge) for Petroleum and Natural Gas and Narendra K Verma, MD, ONGC Videsh were present in New Delhi during the signing of the MoU. The MoU also provides for the Parties to explore the possibility to conclude long term crude oil and feedstock supply agreement(s) while Rosneft ( or its affiliates) would supply crude oil to the refineries of ONGC Videsh ( or its affiliates) located in the Republic of India. For the purpose of such agreement(s) , 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 main stream with its alternative grades.

March 26, 2016 | 12:00pm IST

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The Dollar Business Bureau - Mar 26, 2016 06:33 IST

Russian nod to ONGC's 15% stake in Vankor oilfield

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