New Delhi: ONGC Videsh Ltd on Wednesday signed an agreement to raise stake in Russia’s Vanok oil field by 11% to 26% for about $930 million.
OVL, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), had last year bought 15% stake in the field for $1.268 billion. It paid an additional $930 million for another 11% stake.
The firm and its wholly-owned subsidiary ONGC Videsh Vankorneft Pte Ltd, Singapore “jointly signed definitive agreements with Rosneft, the national oil company of Russia for acquiring additional 11% shares in JSC Vankorneft, a company organized under the law of Russian Federation which is the owner of Vankor Field and North Vankor license,” the company said in a statement.
After the closing of the present transaction, OVL will raise its participation share in Vankorneft to 26%. The acquisition is subject to relevant Board, Government and Indian and Russian regulatory approvals and is expected to close by end of 2016.
The agreement was signed by Narendra K. Verma, CEO & managing director, on behalf of OVL and Igor Sechin, chairman board of directors, Rosneft in Moscow.
Vankor is Rosneft’s (and Russia’s) second largest field by production and accounts for 4% of Russian production. The daily production from the field is around 4,21,000 barrels per day of crude oil on an average and together with earlier acquisition of 15%, OVL’s share of daily oil production from Vankor will be about 1,10,000 bpd.
“The acquisition of additional 11% bears significant strategic importance and would add about 30% to the existing OVL’s production at the current rate and approximately 2.2 million tons of oil and 1.0 billion cubic meter of gas annually,” it said.