Russia clears ONGC’s $1.3-bn Vankor stake deal
Russian government has approved ONGC Videsh Ltd\'s deal to buy 15 per cent in the country\'s second biggest oil field of Vankor from Rosneft for $1.268 billion.
New Delhi : Russian government has approved ONGC Videsh Ltd's deal to buy 15 per cent in the country's second biggest oil field of Vankor from Rosneft for $1.268 billion. OVL, the overseas arm of the state explorer Oil and Natural Gas Corp (ONGC), had in September last year signed an agreement to buy 15 per cent stake in Vankorneft, the developer of the Vankor oil and gas condensate field in Turukhansky district of Krasnoyak Territory in Russia. "We have received approval of the Federal Antimonopoly Service (FAS) for the deal," OVL Managing Director Narendra K Verma said.
With this, all approvals for the deal are in place and Rosneft now has to restructure Vankorneft by giving OVL board positions and carving out the Vankor fields into a separate company, all of which is expected to be completed by June. This month, OVL signed an initial agreement to raise its stake in Vankor to 26 per cent from 15 per cent, while three other state companies Indian Oil Corp (IOC), Oil India Ltd (OIL) and Bharat Petroleum Corp Ltd (BPLC) would together pick up 23.9 per cent.
"We are not very clear if the additional stake would also need FAS approval," he said adding the price for the additional stake is yet to be finalised. Vankor is OVL's fourth biggest acquisition ever. Vankorneft, a subsidiary of Rosneft, was founded in 2004 to carry out the project of the Vankor field development, the largest field to have been discovered and brought into production in Russia in the last 25 years. It is located in the northern part of Eastern Siberia, in Turukhansky District of Krasnoyarsk Territory, 142 km from Igarka.
As of January 1, 2015, the initial recoverable reserves in the Vankor field are estimated at 476 million tonnes of oil and condensate, and 173 billion cubic meters of gas. The area of the Vankor field is 447 square kilometers. Oil and gas condensate production in 2015 was 22 million tons. The 15 per cent stake will give OVL 3.3 million tonnes per annum of oil production.
Prior to the deal, Rosneft, Russia's national oil company, held 100 per cent stake in Vankorneft. This will be the fourth biggest acquisition by OVL. It had in 2013 paid $4.125 billion for a 16% stake in Mozambique's offshore Rovuma Area 1, which holds as much as 75 Trillion cubic feet of gas reserves.