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Government approves ONGC Videsh acquisition of Russian oil field

ongc-russiaGovernment of India said it has given its approval to an acquisition by ONGC Videsh Limited for 11% stake in JSC Vankorneft from Rosneft Oil Company, the National Oil Company of Russian Federation.

Rosneft operates Vankor fields with Vankorneft being its wholly owned subsidiary.

OVL will be paying an amount of US $ 930 million for acquiring 11% stake in Vankorneft.

The acquisition of stake in Vankorneft will provide 3.2 Million Metric Ton of Oil Equivalent to OVL by 2017.

It will also provide an opportunity to Indian public sector oil and gas companies to acquire new technologies from Rosneft.

The acquisition is in line the ONGC’s stated objective of adding high quality international assets to India’s exploration and production portfolio and thereby augmenting India’s energy security.

Vankorneft, Rosneft subsidiary, was established in 2004 for development of Vankor oil and gas condensate field – the largest of the fields, discovered and put into operation in Russia in the last 25 years.

The field is situated in the Turukhansky district of Krasnoyarsk Territory, 142 km away from the city of Igarka.

The initial recoverable reserves of the Vankor field by the January 1st 2015 are estimated at 476 mln tons of oil and condensate and 173 bln cubic meters of gas.

Recently an Indian consortium comprising of Oil India Limited (OIL), Indian Oil Corporation Limited (IOCL) and Bharat PetroResources Limited (BPRL) acquired 23.9% stake in Vankorneft at a cost of US $ 2,020.35 million which will give them 6.56 MMTOE.

Earlier in May 2016, ONGC Videsh Ltd (OVL) completed the formalities on acquisition of 15% stake in Vankorneft at a cost of US $ 1.284 billion which gave OVL 4.11 MMTOE.

ONGC Videsh Ltd and Rosneft had signed an agreement of confirmation of successful completion of the first stage pre-completion actions in relation to the creation of a joint venture in JSC Vankorneft in December last year.

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