OVL to up stake in Russian Rosneft's Vankor oil field by 11%

ONGC Videsh Ltd (OVL) on Wednesday signed an agreement to raise stake in Russia's Vankor oil field by 11 per cent to 26 per cent for about $930 million. OVL, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), had last year bought 15 per cent stake in the field for $1.268 billion. It paid an additional USD 930 million for another 11 per cent stake.

The firm and its wholly-owned subsidiary ONGC Videsh Vankorneft Pte Ltd, Singapore "jointly signed definitive agreements with Rosneft, the national oil company of Russia for acquiring additional 11 per cent shares in JSC Vankorneft, a company organized under the law of Russian Federation which is the owner of Vankor Field and North Vankor license," the company said in a statement.

After the closing of the present transaction, OVL will raise its participation share in Vankorneft to 26 per cent. The acquisition is subject to relevant Board, Government and Indian and Russian regulatory approvals and is expected to close by end of 2016.

The agreement was signed by Narendra K Verma, CEO & Managing Director, on behalf of OVL and Igor Sechin, Chairman Board of Directors, Rosneft in Moscow. Vankor is Rosneft's (and Russia's) second largest field by production and accounts for 4 per cent of Russian production.

The daily production from the field is around 4,21,000 barrels per day of crude oil on an average and together with earlier acquisition of 15 per cent, OVL's share of daily oil production from Vankor will be about 1,10,000 bpd.

"The acquisition of additional 11 per cent bears significant strategic importance and 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 meter of gas annually," it said.