OIL alliance finishes $3-bn Russian fields stake buy
An Oil India Ltd (OIL)-led consortium on Wednesday completed the deal for acquisition of stakes in two Russian oilfields for a total of USD 3.14 billion.
OIL, Indian Oil Corp and a unit of Bharat Petroleum Corporation (BPCL) bought 29.9 per cent stake in Taas-Yuryakh oilfield in East Siberia for USD 1.12 billion and another 23.9 per cent in Vankor oilfield for USD 2.02 billion.
“The transactions received approvals from relevant government authorities of India and Russia in late September and completed simultaneously on October 5, 2016 in Moscow, Russia,” an OIL statement said.
The consortium had in March 2016 signed agreement to buy 29.9 per cent stake in Taas-Yuryakh Neftegazodobycha LLC, which holds and operates two licences for the Srednebotuobinskoye oil and gas condensate field, one of the largest in the East Siberia.
The stake was acquired from LLC RN-Razvedka I Dobycha (RN Upstream), a wholly-owned subsidiary of Rosneft, Russian state firm.
The licence for the central block is valid till 2041 and the northern block till 2032.
The consortium had in June signed agreement to buy another 23.9 per cent in JSC Vankorneft, a subsidiary of Rosneft, which holds two licences for the Vankor oil fields in East Siberia valid till 2112.
The deals closed today.
Officials said the Vankor asset has been valued at USD 8.45 billion as on May 31, 2015 on zero debt and working capital basis for arriving at the acquisition price.
This is the same value at which ONGC Videsh, the overseas arm of the state-owned Oil and Natural Gas Corporation (ONGC), bought 15 per cent stake in Vankor in December 2015. That deal closed on May 31 this year and the company has signed up for buying another 11 per cent in the same field.
Taas currently produces about 21,000 barrels per day of oil, and a peak of 1,00,000 bpd is expected by 2021. Vankor, on the other hand, is past its peak, which was 161 million barrels (22 million tonnes) in 2014 and 2015. It currently produces 154 million barrels.
Rosneft had last year sold 20 per cent stake in Taas to BP of UK for USD 750 million. The Russian firm will hold 50.1 per cent stake in the project after the deal.
Indian Consortium was advised byRothschild& Coas financial adviser, CGG Vostok as Technical adviser, Latham & Watkins as Legal adviser and Ernst and Young as accounting and tax adviseron both the transactions.
Oil India Limited (OIL), a Navratna PSU, is a fully integrated E&P company in the upstream sector and is the second largest national oil and gas company in India as measured by total proved plus probable oil and natural gas reserves and production.
OIL is engaged in the business of exploration, development and production of crude oil and natural gas, transportation of crude oil and production of LPG.
It has vast experience in reservoir management and expertise in IOR/EOR operations. OIL also provides various E&P related services to make it a fully integrated E&P Company. Besides having a Pan-India presence, OIL has Participating Interest in blocks in over ten countries overseas viz Libya, Gabon, Nigeria, Yemen, Venezuela, USA, Mozambique, Russia, Myanmar, and Bangladesh besides a product pipeline in Sudan.
The Company also has a stake in Numaligarh Refinery Limited and Brahmaputra Cracker and Polymer Limited. This completes Oil India’s presence in the entire hydrocarbon value chain.
OVL gets Govt nod to up stake in Russian oil field to 26%
ONGC Videsh Ltd (OVL) on Wednesday got government nod to raise its stake in Russia’s second biggest oil field of Vankor by 11 per cent at an investment of USD 930 million. OVL, which had previously bought 15 per cent stake in Vankor from Russian national oil firm Rosneft for USD 1.268 billion, will get additional 3.2 million tons of oil equivalent on top of 4.11 million tons secured earlier.
Besides OVL’s 26 per cent, a consortium of comprising Oil India (OIL), Indian Oil Corporation (IOC) and Bharat PetroResources (BPRL) acquired 23.9 per cent stake in the field at a cost of USD 2.02 billion, giving them 6.56 million tons of oil. Parallely, OIL-led consortium today completed the deal paying USD 2.02 billion to Rosneft.
“Indian companies have now invested USD 4.2 billion in Vankor. Together with 29.9 per cent stake OIL-IOC-BPRL consortium bought in Taas-Yuryakh oilfield in East Siberia for USD 1.12 billion, the total investment in Russia this year is USD 5.46 billion. This investment will give India 15.18 million tons of oil equivalent,” Oil Minister Dharmendra Pradhan said.
The investment made compares to USD 28.48 billion investment by Indian companies overseas in the past 50 years, giving it about 10 million tons of oil equivalent, he said.
OVL had in May closed a deal to acquire 15 per cent stake in JSC Vankorneft -- a company organised under the law of Russian Federation, which is the owner of
Vankor Field and North Vankor licence.Rosneft, the national oil company of Russia continues to hold the remaining 50.1 per cent shares of JSC Vankorneft.