OVL, IOC, Oil India, BPRL in talks to buy 35% in Russia's Vankor oil field for $2.9 bn

A consortium led by ONGC Videsh Ltd (OVL), Indian Oil Corp (IOC), Oil India and Bharat PetroResources Ltd (BPRL), a unit of BPCL, are in talks to buy about 35 per cent additional stake in Russia's Vankor oil field for nearly $2.9 billion.

Vankor, located in East Siberia and owned by Russian state-owned oil company Rosneft, is the country's second-largest field by production and accounts for 4 per cent of Russian output producing around 4,42,000 barrels of crude oil per day.

OVL, the overseas arm of the state-owned Oil and Natural Gas Corp (ONGC), had last year acquired 15 per cent stake in Vankor for $1.35 billion. (See: ONGC buys 15% in Russia's Vankor oil field for Rs8,933 crore)

The acquisition gave OVL about 3.5 million tonnes of crude oil a year, and two seats on the board of directors of Vankorneft, a Rosneft subsidiary that operates the Vankor field.

According to media reports Rosneft is now willing to sell a total of 49.9 per cent in Vankor to the Indian consortium, of which, OVL will hold 26 per cent, including 15 per cent it acquired last year, and the remaining 23.9 per cent will be split equally between IOC, OIL India and BPRL.

Russia, pressured by western sanctions and falling crude prices, offered 10 per cent of the field to China's China National Petroleum during president Xi Jinping's visit to Russia in November 2014.

The consortium may sign a MoU for the additional stake in Vanko during Rosneft CEO Igor Sechin visit to India next week, as well as finalise the MoU signed in December last year by IOC, OIL and BRPL for a 29 per cent stake in the Taas-Yuriakh oil field in East Siberia for around $1 billion.

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

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.

OVL 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 drastic decline.