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ONGC Videsh ups Vankorneft stake

By  AOG Staff Wednesday, 14 September 2016 13:06
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ONGC Videsh and its wholly owned subsidiary ONGC Videsh Vankorneft Ltd. (OVVL) jointly signed definitive agreements with Russia’s Rosneft, to acquire an additional 11% in shares in JSC Vankorneft, a joint venture company organized under the law of Russian Federation, which is the owner of Vankor Field and North Vankor license in Russia.

On 31 May, ONGC Videsh closed the acquisition of 15% shareholding interest. After the closing of the present transaction, ONGC Videsh 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 and managing director, on behalf of ONGC Videsh and Igor Sechin, chairman board of directors, Rosneft in Moscow on 14 September.

Vankor is Rosneft’s (and Russia’s) second largest field by production and accounts for 4% of Russian production. The production from the field is around 421,000 b/d of crude oil on an average and together with earlier acquisition of 15%, ONGC Videsh’s share of daily oil production from Vankor will be about 110,000 b/d. The acquisition of additional 11 % bears significant strategic importance and would add about 30% to the existing ONGC Videsh’s production at the current rate and approximately 2.2 million tonne of oil and 1 Bcm of gas annually.

The present transaction provides an opportunity to ONGC Videsh 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. This acquisition also has significant strategic importance to India, both in terms of augmentation of India’s Energy Security as well as enhancing India’s stature in the global political and economic arenas.

Image from ONGC.

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