Cabinet approves ONGC raising stake by 11% in Russia's Vankor oil field for $930 mn

The Union Cabinet today approved ONGC Videsh Ltd (OVL), buying an additional 11-per cent stake in Russia's Vankor oil field in East Siberia for $930 million.

The approval comes a year after OVL, the overseas investment arm of the state explorer ONGC, acquired a 15-per cent stake in the Vankor oil field from Rosneft, for about $1.35 billion (Rs8,933 crore). (See: ONGC buys 15% in Russia's Vankor oil field for Rs8,933 crore)

The deal gave OVL 4.11 million tonnes of oil equivalent and two seats on the board of directors of Vankorneft, a Rosneft subsidiary that operates the Vankor field.

The new stake in Vankor, Russia's second-largest oil field, will give OVL about 3.5 million tonnes of oil equivalent a year.

Vankor, which started production in 2009, holds recoverable reserves of about 500 million tonnes of oil.

Vankor reported production of about 80.9 million barrels of oil last year.

The field produces more than 60,000 tonnes (about 440,000 barrels) a day and is one of the main sources of supply for the eastern Siberia-Pacific Ocean pipeline.

Russia, pressured by western sanctions and falling crude prices, offered 10 per cent of the field to China National Petroleum during president Xi Jinping's visit to Russia in November last year.

ONGC Videsh also owns 20 per cent in the Sakhalin-1 project off Russia's far eastern coast, which it acquired in 2001. Besides, ONGC spent $2.1 billion to buy Imperial Energy Corp in Russia in 2009, output from which witnessed a decline.