Oil and Natural Gas Corp. Ltd (ONGC) has signed definitive agreements with Russia’s national oil company Rosneft PJSC to acquire an additional 11% stake in its unit, JSC Vankorneft, which has a licence to produce hydrocarbons from the Vankor field in Siberia.
Once the transaction is completed, ONGC Videsh Vankorneft Pte Ltd, a unit of the oil explorer, will hold a 26% stake in Vankorneft, including the 15% stake it had acquired earlier for $1.26 billion.
The definitive agreement was signed in Moscow by Narendra K. Verma, chief executive officer and managing director of ONGC’s overseas arm ONGV Videsh Ltd, and Igor Sechin, chairman of Rosneft’s board of directors.,
“Vankor is Rosneft’s (and Russia’s) second largest field by production and accounts for 4% of Russia’s production. The daily production from the field is around 421,000 barrels per day (bpd) of crude oil on an average and together with the earlier acquisition of 15%, ONGC Videsh’s share of daily oil production from Vankor will be about 110,000 bpd.”
The acquisition of the extra 11% stake has significant strategic importance and would add about 30% to ONGC Videsh’s existing production at the current rate and about 2.2 million tonnes of oil and 1 billion cu. m of gas annually.