By Subhash Narayan Sep 04 2015 , New Delhi, Tags: ONGC Videsh (OVL), Companies, Tie-ups and Business deals, ONGC Videsh, the overseas arm of the state explorer, will acquire 15 per cent stake in Russian oil producer Rosneft’s Vankor oil field in Siberia for close to $ 1.3 billion. This will be fourth biggest acquisition by OVL that will help the company get access to 3.3 million tonne per annum of oil production. OVL on Friday signed an agreement to buy 15 per cent interest in Vankorneft, the owner of Vankor oil and gas condensate field – Russia’s second biggest in terms of production – in the Turukhansky district of Krasnoyak territory. Rosneft holds 100 per cent shares in Vankorneft. The field has recoverable reserves of 2.5 billion barrels and will give OVL 3.3 million tonne per annum of oil production. “The acquisition is subject to relevant board, government and regulatory approvals and is expected to close by the middle of 2016,” OVL said in a statement. “The present transaction provides an opportunity to OVL 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,” the statement added. While both OVL and Rosneft did not give value of the deal, a source privy to the development said the acquisition would require OVL to pay $1.3 billion. Citi worked as the sole exclusive financial advisor whereas Dentons worked as legal advisor to OVL on this transaction. For OVL, the Russia deal will be its fourth biggest acquisition. The company in 2013 paid $4.125 billion for a 16 per cent stake in Mozambique’s offshore Rovuma area 1, which holds as much as 75 trillion cubic feet of gas reserves. In 2009, OVL had bought Russia-focused Imperial Energy for $2.1 billion. Before that in 2001 it had paid $1.7 billion for a 20 per cent interest in the Sakhalin-1 oil and gas field off Russia’s far eastern coast. OVL currently has 36 projects in 17 countries including Azerbaijan, Bangladesh, Brazil, Colombia, Iraq, Kazakhstan, Libya, Mozambique, Myanmar, Russia, South Sudan, Sudan, Syria, Venezuela, Vietnam and New Zealand. Output from its fields is 167,000 barrels of oil and oil equivalent gas per day and has total oil and gas reserves of about 647 million tonne of oil equivalent. Upon completion of the Vankor field deal, OVL will have two seats in the board of directors of Vankorneft, Rosneft said in a statement. Rosneft, whose stake in the project will come down to 85 per cent, will, however, keep full control of the general infrastructure of Vankor cluster, including oil pipeline Vankor-Purpe.Vankorneft is Russia’s second-largest oil producing development. The Vankor field started production in 2009 and has recoverable reserves estimated at about 500 million tonne. Vankor pumped about 80.9 million barrels of oil in the first six months of the year. The field produces more than 60,000 tonne (442,000 barrels) a day and is one of the main sources of supply for the eastern Siberia-Pacific Ocean pipeline. Apart from OVL, the Russian entity is also expected to invite other companies for taking up stakes in Vankor fields. Source: mydigitalfc.com, Reference Image:flickr.com
