ONGC to buy 15% of Russian Vankorneft from Rosneft for around $1.3bn

Russian oil giant Rosneft has agreed to sell 15% of Vankorneft to ONGC Videsh, which is the overseas unit of Indian Oil and Natural Gas Corporation (ONGC).

ONGC will pay around $1.275bn for the stake, reports Russian news agency Interfax.

Vankorneft is the developer for the Vankor oil and gas condensate field, which is the located in Turukhansky district of Krasnoyak Territory in Russia.

The oil field is the second largest in the country and accounts for 4% of its total production.

Up to 1 January, the field had estimated recoverable reserves for 476 million tonnes of oil and condensate and 173 billion m³ of gas.

Transportation of the oil produced at the field is carried out through 556km-long Vankor-Purpe pipeline.

The deal, which is expected to be closed by the middle of next year, is subject to approvals from the company boards, government and regulatory bodies.

The deal will allow the Indian energy giant to expand its presence in Russia, which is in-line its strategy to add quality international assets to its existing exploration and production (E&P) portfolio.

It will also help in improving energy security of the country and increase its ‘stature in the global political and economic arenas’, ONGC said.

Rosneft president and management board chairman Igor Sechin said: "Collaboration in such a large-scale project will allow establishing a brand new level of strategic cooperation between Rosneft and ONGC Videsh.

"This will accelerate the development of our partnership, in other large-scale oil and gas upstream projects in the region."

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Image: Rosneft president and management board chairman Igor Sechin signing deal with ONGC Videsh managing director Narendra Verma. Image: courtesy of Rosneft.