Indianoil, OIL in talks to buy stake in Rus­sia's Vankor field

Resource Digest - - CONTENTS -

State-owned In­dian Oil Cor­po­ra­tion (IOC) and its part­ners are in talks to buy a 49 per cent stake in Rus­sia's Vankor clus­ter oil­fields to con­sol­i­date their pres­ence in the en­er­gyrich Arc­tic re­gion. IOC, Oil In­dia Ltd and Bharat Petrore­sources Ltd (a unit of Bharat Petroleum Cor­po­ra­tion Ltd or BPCL) are look­ing at buy­ing a stake in the Suzun­skoye, Tag­ul­skoye and Lodochnoye fields — col­lec­tively known as Vankor Clus­ter. ONGC Videsh Ltd (OVL), the over­seas arm of state-owned Oil and Nat­u­ral Gas Cor­po­ra­tion (ONGC), too is in­ter­ested in the fields.

Ros­neft, Rus­sia's na­tional oil com­pany which owns the fields, wants to re­tain a ma­jor­ity stake and is keen to sell only up to 49 per cent stake. In case OVL is ac­com­mo­dated, the en­tire 49 per cent stake would have to be split be­tween the In­dian com­pa­nies. OVL may pos­si­bly take 26 per cent in pro­por­tion to the stake it bought in the main Vankor oil­field.

The OIL-IOC-BPRL com­bine may take a 23.9 per cent stake in line with its hold­ing in the main Vankor field. Vanko­rneft, a sub­sidiary of Ros­neft, is de­vel­op­ing the Vankor oil and gas con­den­sate field, sit­u­ated in the north­ern part of East­ern Siberia. In 2013, Vanko­rneft was cho­sen as an op­er­a­tor on de­vel­op­ment of new fields of the Vankor clus­ter Suzun­skoye, Tag­ul­skoye and Lodochnoye fields, lo­cated close to the Vankor field.

The re­serves of the Suzun­skoye field ex­ceed 56 mil­lion tonnes of oil and con­den­sate, and 35 bil­lion cu­bic me­ters of gas. Last year, OVL first ac­quired a 15 per cent stake in Rus­sia's sec­ond big­gest oil­field of Vankor for $1.268 bil­lion and then bought an­other 11 per cent for $930 mil­lion.

The 26 per cent stake would give ONGC Videsh Ltd 7.31 mil­lion tonnes of oil. The con­sor­tium of OIL-IOC-BPRL ac­quired 23.9 per cent stake in the field at a cost of $2.02 bil­lion, giv­ing them 6.56 mil­lion tonnes of oil.

Ros­neft con­tin­ues to hold the re­main­ing 50.1 per cent shares of JSC Vanko­rneft. The field has re­cov­er­able re­serves of 2.5 bil­lion bar­rels. Be­sides, the OIL-IOC-BPRL con­sor­tium has taken an­other 29.9 per cent stake in a separate Taas-yuryakh oil­field in East Siberia for $1.12 bil­lion.

The in­vest­ments have taken the to­tal out­lay in Rus­sia this year to $5.46 bil­lion. These in­vest­ments will give In­dia 15.18 mil­lion tonnes of oil equiv­a­lent. The in­vest­ment made com­pares to $28.48 bil­lion in­vest­ment by In­dian com­pa­nies over­seas in the past 50 years, giv­ing it about 10 mil­lion tonnes of oil equiv­a­lent.

While Vankor pro­duces about 442,000 bar­rels of oil per day (4 per cent of Rus­sian crude oil pro­duc­tion), Taas cur­rently pro­duces about 21,000 bar­rels per day of oil, and apeak of 1,00,000 bpd is ex­pected by 2021.

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