Moscow: Rosneft PJSC, Russia’s biggest oil producer, said it has all but completed its multibillion-dollar joint acquisition of Essar Oil Ltd, expanding its access to the Asian nation’s burgeoning fuel market.
“Yesterday the legal decision on Rosneft’s guaranteed entry in Essar was formalized," Rosneft chief executive officer Igor Sechin said Thursday at the Moscow-based company’s annual general meeting.
“After some technical procedures are done, we’ll consider the deal closed," he added.
India’s billionaire Ruia brothers in October agreed to sell a 98% stake in Essar Oil to Rosneft and a consortium of Trafigura Group Pte and United Capital Partners for about $13 billion.
The deal—described by Essar as the single-biggest foreign direct investment in India—includes the 400,000-barrel-a-day Vadinar refinery, giving Rosneft an outlet in South Asia for its production as OPEC and non-OPEC countries vie for market share. Saudi Arabia has also bought stakes in refiners overseas.
“We expect to complete the transaction in the upcoming few weeks," Manish Kedia, a spokesman for Essar Oil, said Thursday by phone from Mumbai.
He declined to comment further.
As Russia’s No. 1 oil producer, Rosneft has borne the brunt of the output cuts agreed to by the government with OPEC last year, and then extended in May.
Yet the company isn’t curtailing its spending plans, indicating its readiness to return to growth once the production deal expires.
Rosneft intends to invest 1.065 trillion rubles ($18 billion) this year, according to a presentation at the AGM.
That tallies with an outlook from January, which put investment at 1.1 trillion rubles in 2017, up from 750 billion last year, according to the Kremlin website. Bloomberg