Business

OVL buys 15 % stake in Rosneft’s Vankor oil field 

While the deal value is reportedly $1.3 billion, the company spokesperson told The Hindu that ONGC Videsh had not as yet shared the exact amount.

NGC Videsh Ltd., (OVL), a wholly-owned subsidiary of Oil and Natual Gas Corporaration (ONGC) signed an agreement on Friday to buy a 15 per cent stake in CSJC Vankorneft, a company organised under the law of the Russian Federation, and the owner of the Vankor field and North Vankor license.

Rosneft Oil Company of Russia wholly-owns Vankorneft.

“Vankor is Rosneft’s (and Russia’s) second largest field by production and accounts for 4 per cent of Russian production. Vankor oil field has recoverable reserves of 2.5 billion barrel, will give OVL 3.3 million tonnes per annum of oil production. The field currently produces around 4.40 lakh billion barrels per day (bpd) of crude oil on an average with ONGC Videsh’s share of daily production at about 66,000 bpd,” State-owned Oil and Natural Gas Company, the parent company of ONGC Videsh, said in a statement.

While the deal value is reportedly $1.3 billion, the company spokesperson told The Hindu that ONGC Videsh had not as yet shared the exact amount.

If correct, this will make this deal the fourth-biggest acquisition by ONGC Videsh. It had earlier paid $4.125 billion in 2013 for a 16 per cent stake in Mozambique’s offshore Rovuma Area 1. The two largest acquisitions it has made were both in Russia, in 2001 and 2009. OVL currently has 36 projects in 17 countries from New Zealand to Colombia.

ONGC will be able to nominate two directors on Vankorneft’s board while Rosneft will keep control of the project operations, the companies said in a joint statement. The present transaction provides an opportunity to ONGC Videsh to enhance its presence in Russia and is consistent with its stated strategic objective of adding high quality international assets to its existing E&P portfolio. This acquisition also has significant strategic importance to India, both in terms of augmentation of India’s energy security as well as enhancing India’s stature in the global political and economic arenas.

The agreement was signed by Narendra K. Verma, CEO and Managing Director, ONGC Videsh, and Igor Sechin, Chairman, Board of Directors, Rosneft, during the Eastern Economic Forum (EEF) held in Vladivostok on Friday in the presence of Vladimir Putin, the President of the Russian Federation.

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Printable version | Mar 31, 2020 7:52:25 PM | https://www.thehindu.com/business/ovl-buys-15-stake-in-rosnefts-vankor-oil-field/article7616384.ece

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