A consortium of Indian companies led by ONGC Videsh (OVL) is to acquire a 49 per cent stake in Russia’s Vankor cluster oilfields.
Prime Minister Narendra Modi and Russian President Vladimir Putin agreed the deal as part of a wider range of investment agreements signed at the Eastern Economic Forum in Vladivostok September 4 to 6. Modi was the chief guest at this year’s Forum.
Indian firms have been in dialogue with Russia since 2017 for a possible stake in the oilfields that will consolidate their presence in the energy-rich Arctic region, India’s Economic Times reported.
However, in an unprecedented move, Modi also announced that India will loan Russia US$1 billion loan to develop Russia’s Far Eastern territories.
“In order to continue and help develop the Far East, India will provide a $1 billion credit line. This is a completely unprecedented measure when we provide such a special credit line to another country,” Modi said during his speech at the Eastern Economic Forum (EEF) in Vladivostok.
OVL, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), is raising its current stake in the Vankor cluster to a 26 per cent stake in the Suzunskoye, Tagulskoye and Lodochnoye fields. Indian Oil Corp (IOC) will take 0.24%, Oil India Ltd, 1.31% and Bharat PetroResources Ltd (a unit of Bharat Petroleum Corp Ltd or BPCL) would split the rest 23 per cent, according to India’s Economic Times.
Rosneft, Russia’s national oil company owns the fields and will retain a controling 50.1 percent stake.
Energy-hungry India is keen on sourcing one million barrels per day of oil and oil-equivalent gas from Russia and had identified Sakhalin-3 in the Far East, Vankor in East Siberia, and Terbs and Titov oilfields in the Timan Pechora region as fields for potential collaboration.
OVL already has a 20 per cent stake in the offshore Sakhalin-1 oil and gas field (partnered with Rosneft and Exxonmobil) in Far East Russia, and in 2009 it acquired Imperial Energy’s Siberian fields for USD 2.1 billion, The Economic Times reported.