ONGC Videsh Ltd has taken a bridge loan of $1.2 billion from a group of foreign banks at a highly competitive rate of about 1.3 percent to fund its acquisition of 15 percent stake in Russia’s second biggest oil field of Vankor. Banks including Citi, DBS, Mizuho, Standard Chartered and Sumitomo Mitsui Banking Corp have given a nine month loan to OVL (ONGC Videsh Ltd), the overseas arm of stateowned Oil and Natural Gas Corp (ONGC), at an interest rate of Libor plus 83 basis points.
At one month average Libor rate, the interest rate comes to about 1.3 percent. Last year, OVL struck a deal to buy 15 percent in the Russia’s second biggest oil field of Vankor from Rosneft for $1.268 billion.
In March, OVL signed an initial agreement to raise its stake in Vankor to 26 percent from 15 percent, while three other state companies Indian Oil Corp (IOC), Oil India Ltd (OIL) and Bharat Petroleum Corp Ltd ( BPLC), would together pick up 23.9 percent.
Vankor is OVL’s fourth biggest acquisition ever. Vankorneft, a subsidiary of Rosneft, was founded in 2004 to carry out the project of the Vankor field development, the largest field to have been discovered and brought into production in Russia in the last 25 years. It is located in the northern part of Eastern Siberia, in Turukhansky District of Krasnoyarsk Territory, 142 km from Igarka.
As of January 1, 2015, the initial recoverable reserves in the Vankor field are estimated at 476 million tonnes of oil and condensate, and 173 billion cubic meters of gas. The area of the Vankor field is 447 square kilometers. Oil and gas condensate production in 2015 was 22 million tonnes.
The 15 percent stake will give OVL 3.3 million tonnes per annum of oil production. Prior to the deal, Rosneft, Russia’s national oil company, held 100 percent stake in Vankorneft.
This will be the fourth biggest acquisition by OVL. In 2013, it paid $4.125 billion for a 16 percent stake in Mozambique’s offshore Rovuma Area 1, which holds as much as 75 Trillion cubic feet of gas reserves.
In 2009, it had bought Russiafocused Imperial Energy for $2.1 billion. Prior to that, in 2001, it had paid $1.7 billion for a 20 percent interest in the Sakhalin oil and gas field of Russia’s far eastern coast.