OVL buys 11% in Russia’s Vankor oil fields for$930 m

The Cabinet Committee on Economic Affairs (CCEA) has cleared approved the acquisition by ONGC Videsh Ltd (OVL) of 11 per cent stake in the Russian state-run Vankor oil fields from Rosneft Oil Company for a consideration of $930 million. This will augment OVL’s ownership in the project to 26 per cent.

The CCEA met under Prime Minister Narendra Modi on Wednesday. “The acquisition of stake in Vankorneft will provide 3.2 million tonnes of oil equivalent (MTOE) to OVL by 2017,” an official press release said.

OVL is the overseas arm of public sector Oil & Natural Gas Corp (ONGC). The current acquisition is in line ONGC’s stated objective of adding high-quality international assets to India’s exploration and production (E&P) portfolio and thereby augmenting India’s energy security, said the release.

Recently, an Indian consortium comprising of Oil India Limited (OIL), Indian Oil Corporation Limited (IOCL), and Bharat Petro-Resources Limited (BPRL) acquired 23.9 per cent stake in Vankorneft at a cost of US $2,020.35 million which will give them 6.56 MMTOE. Earlier in May 2016, OVL completed the formalities on acquisition of 15 per cent stake in Vankorneft at a cost of $1.284 billion which gave OVL 4.11 MMTOE.

Production from Vankor is about 421,000 barrels per day (bpd) of crude oil. Vankor, which is in Siberia, is Rosneft’s second largest field in terms of output.