ONGC Videsh is in talks to raise stake in Russia’s second biggest oilfield of Vankor while Indian Oil Corp-Oil India eye share in East Siberia oilfield
Moscow : ONGC Videsh Ltd (OVL) is in talks to raise its stake in Russia’s second biggest oilfield of Vankor while Indian Oil Corp-Oil India are in negotiations for a stake in Taas-Yuriakh Neftegazodobycha oilfield in East Siberia as India looks to deepen energy ties with Russia.
The slew of agreements signed during Prime Minister Narendra Modi’s visit to Russia included a document that provides for cooperation between OVL, the overseas arm of Oil and Natural Gas Corp (ONGC), and Russia’s top oil firm Rosneft. OVL was originally interested in taking 25 per cent stake in Vankor but Rosneft in September agreed to sell a 15% interest for $1.268 billion.
OVL and Rosneft signed an Agreement of Confirmation of successful completion of the first stage of the Indian firm’s acquisition of 15 per cent stake in Vankor. OVL had on September 4 signed Share Purchase Agreement (SPA) and Shareholders Agreement (SHA) with Vankorneft, a unit of Rosneft that is the developer of the Vankor oil and gas condensate field in Turukhansky district of Krasnoyak territory in Russia. The field, which has recoverable reserves of 2.5 billion barrels, will give OVL 3.3 million tonnes per annum of oil production.
The MoU signed by Rosneft and OVL provides for cooperation for geologic survey, exploration and production of hydrocarbons onshore and on the continental shelf of the Russian Federation. “Particularly, the companies will analyse the possibility of expanding their partnership aimed at the development of perspective Rosneft projects in East Siberia”, OVL said.
Energy-starved INDIA
India, the third largest oil importer after the US and China, has been pushing for greater involvement in major gas and oil exploration projects in Russia.
Russia is one of the top oil producers globally and has huge reserves of natural gas. The volume of current bilateral trade between the two countries is around USD 10 billion and both sides were of the view that deeper engagement in hydrocarbons sector will boost bilateral trade significantly and help them achieve the target of USD 30 billion in annual trade over the next 10 years.
Expand bilateral trade
Sources said besides formalising the September deal, OVL Managing Director Narendra K Verma and Rosneft Chairman Igor Sechin also signed a memorandum of understanding in presence of Modi and Russian President Vladimir Putin that provides for discussions on raising the stake in Vankor. IOC and OIL signed a separate MoU with Rosneft where they “agreed to examine the possibility of cooperation in respect of the Taas-Yuriakh Neftegazodobycha LLC asset”, IOC/OIL said.
IOC-OIL are looking at 29 per cent stake in Taas-Yuriakh, which operates the Srednebotuobinsk field. It is expected to produce more than 5 million tonnes of oil annually from 2017. Rosneft in October sold a 20 per cent share in Taas-Yuriakh to BP for USD 750 million.
India’s Ambassador P S Raghavan said OVL signed another MoU with Rosneft expressing interest in a number of oil fields both in arctic shelf and in other parts of Syberia near Vankorneft and the intention for striking a deal.
Putin said an agreement between Rosneft and Essar envisaged large-scale deliveries of oil and petroleum products to Indian refineries – up to 10 million tonnes a year over a period of 10 years. Roseneft will pick up 49 per cent stakes in India’s second largest oil refinery in Vadinar in Gujarat. As per the deal, the crude oil that goes from Russia will be refined at Vadinar.