Russia’s Rosneft in talks to buy stake in Essar Oil
“There are discussions going on. I cannot comment anything further,” said a source close to the Russian giant.
Last year, Rosneft had signed an initial deal to supply 10 million tonnes a year or 200,000 barrels per day (bpd) of oil to Essar Group over 10-years.
There are negotiations on signing a firm term sheet for beginning of supplies, another source said.
At the time of signing crude deal, Russian bank VTB had inked a deal to open a USD 1 billion credit line to Essar.
The source close to Rosneft said Essar has offered a strategic stake of 50 per cent minus 1 share in Essar Oil.
Industry sources said Essar may be expecting a valuation of up to USD 8 billion of the company.
Essar Oil operates a 20 million tons a year refinery at Vadinar and also has 1,600 petrol pumps in the country. It also has five coal-bed methane (CBM), holding up to 10 Trillion cubic feet of gas resource.
When contacted, an Essar spokesperson said: “It is not our policy to comment on market speculations.
“The company has already informed the Stock Exchanges last week stating that there is no event or development which is required to be submitted to the stock exchanges as per the listing agreement.”
Essar may cut imports from Iran to accommodate Russian barrels. Essar depends heavily on Iran to feed its Vadinar refinery, importing about one-fourth of its oil needs from the Persian Gulf nation.
Rosneft is majority owned by the Russian government with BP Plc holding under a 20 per cent stake and public shareholders around 10 per cent.
Essar Oil Ltd shares hit a five-year high, with the stock hitting an upper circuit of 10% on the back of higher volumes. Its share touched an intra-day high of Rs 153.80, a level last seen on 11 November 2010, before closing at Rs 146.45 on the BSE.
The stock has surged over 56 per cent in the last six trading sessions.
Anil Agarwal meets Jaitley; discusses Vedanta-Cairn merger
Billionaire Anil Agarwal on Monday met Finance Minister Arun Jaitley to explain the merger that hinges on minority shareholder support. A day after offering minority shareholders of Cairn India one equity share and one 7.5 per cent preference share in Vedanta Ltd, Agarwal met Jaitley as well as Revenue Secretary Shaktikanta Das.
The merger needs approval of at least half of the minority shareholders. State-owned Life Insurance Corp of India (LIC) holds 9.06 per cent stake in Cairn India, second only to 9.82 per cent of UK’s Cairn Energy Plc, which had in 2011 sold majority stake in Cairn India to Vedanta for $8.67 billion.
Mindful of the fact that the merger will fall if LIC along with Cairn Energy were to vote against, Vedanta today reached out to state insurance company for support.
“This is my regular visit to finance ministry. Whenever I come here, I appraise them of what is happening. We had told them about this is the merger in advance. We told them today also, updated them on the merger of Vedanta Ltd and Cairn India,” Agarwal told reporters after the meeting.
Vedanta chief executive Tom Albanese said he will seek support from minority investors based in India this week and will meet investors in the UK next week. Explaining the rationale of the merger, Agarwal said Vedanta is trying to create a natural resource company in India that will produce oil and gas, aluminium, copper, zinc, iron ore.