Russian oil group Rosneft has signed a sale and purchase agreement with Indian private energy group Essar, on the acquisition by Rosneft of a 49% stake in Essar Oil. The SPA follows a preliminary agreement that was signed in March 2016.
Essar Oil operates the second largest refinery in India, the 20 Mt/year Vadinar Refinery, and plans to implement a modernisation programme to expand the refinery’s capacity up to 25 Mt/year, including production of 1 Mt/year of propylene and polypropylene. Rosneft plans to supply the refinery with Venezuelan crude. Essar Oil Limited also owns 2,700 fuelling stations in India and plans to expand its network up to 5,000 stations. The transaction is expected to be completed by the end of 2016. It will enable Rosneft to enter the Indian market and boost its positions in the Asia Pacific region.
In addition, Rosneft has signed an agreement with Indian state-owned petroleum explorer Oil and Natural Gas Corporation (ONGC) for the sale of a further 11% stake in Vankorneft. Vankorneft is a subsidiary of Rosneft established in 2004 to develop the Vankor oil and gas condensate field, the second-largest oil field in Russia with recoverable reserves estimated at 476 Mt of oil and condensate and 173 bcm of gas. ONGC acquired a first 15% interest in the field in May 2016 and will now reach 26%. In June 2016, Rosneft signed a sale agreement with a consortium of Indian companies led by Oil India Ltd along with Indian Oil Corporation and Bharat PetroResources, to sell a 23.9% stake in Vankorneft and in the Vankor field in Russia. The share of Indian companies in Vankorneft will then reach 49.9%.
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