The Essar Group will sign a long-term crude oil import deal with Russia's Rosneft during President Vladimir Putin's visit to New Delhi on Thursday, government and industry sources said on Wednesday.
“Essar will sign an MoU (memorandum of understanding) with them (Rosneft),” two Indian government sources said. “The deal will be for ten years,” an industry source familiar with the matter said.
The Essar group operates the 405,000 barrels per day (bpd) Vadinar refinery in Gujarat and also the 296,000 bpd Stanlow refinery in northwest England, which is operating at below its capacity.
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Volumes, pricing and other details of the deal with state-controlled Rosneft, the world’s largest listed oil firm by output, were not immediately known. Essar depends heavily on Iran to feed its Vadinar refinery.
In January, sources told Reuters that Russia and Iran were negotiating an oil-for-goods swap deal.
Russian Economy Minister Alexei Ulyukayev was quoted on November 30 as saying the deal with Iran might be sealed soon.
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Iran Oil Minister Bijan Zanganeh on Wednesday said there was no such plan in prospect.
Russia, isolated by the West over its annexation of Crimea and role in the Ukraine crisis, has a close relationship with India that dates back to the Soviet era.
India and Russia are expected to issue a joint statement aimed at strengthening the energy partnership between the two countries.
State-run explorer Oil India Ltd. will also sign an initial deal with Russia’s state-owned Zarubezhneft to cooperate in the hydrocarbons sector, sources said.
Oil India will explore hiring the Moscow-based firm’s drilling vessel Deep Venture and seek Zarubezhneft’s help in extracting heavy oil from Oil India’s Rajasthan block.
An Essar spokesman declined to comment. Oil India Chairman S. K. Srivastava declined comment. Rosneft could not be immediately reached for comment.