Hindustan Petroleum Corporation joins talks to buy stake in Russian oil fields

New Delhi: State-owned Hindustan Petroleum Corporation (HPCL) has joined the Indian consortium negotiating buying a 49 percent stake in Russia's Vankor Cluster oil fields in the Arctic region.

Originally, ONGC Videsh Ltd, the overseas investment arm of state-owned Oil and Natural Gas Corporation (ONGC), signed an MoU to explore buying a stake in Suzunskoye, Tagulskoye and Lodochnoye fields -- collectively known as Vankor Cluster.

Later, Indian Oil Corporation (IOC), Oil India (OIL) and Bharat PetroResources (BPRL), a unit of Bharat Petroleum Corporation, came in using the influence of the oil ministry.

Now, HPCL has shown interest and has joined the talks, sources privy to the development said.

Rosneft, Russia's national oil company that owns the fields, wants to retain a majority stake and is keen to sell only up to 49 percent stake.

Sources said OVL is keen to take the largest share of 20 -26 percent as the project had originally come to it and others joined in later.

Representational image. Reuters

Representational image. Reuters

If OVL takes 26 percent stake, OIL-IOC-BPRL-HPCL may have 23.9 percent, they said.

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 Vankor Cluster located close to the Vankor field. The reserves of Suzunskoye field exceed 56 million tonnes of oil and condensate and 35 billion cubic metres of gas.

Last year, OVL first acquired 15 percent in Russia's second-biggest oil field of Vankor for US $1.27 billion and then bought another 11 percent for US $930 million. The 26 percent stake would give OVL 7.31 million tonnes of oil.

The consortium of OIL-IOC-BPRL acquired 23.9 percent stake in the field at a cost of US $2.02 billion, giving them 6.56 million tonnes of oil. Rosneft continues to hold the remaining 50.1 percent 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 percent stake in a separate Taas-Yuryakh oil field in East Siberia for US $1.12 billion. The investments have taken the total outlay in Russia this year to US $5.46 billion.

These investments will give India 15.18 mt of oil equivalent. These compare to US $28.48 billion investment by Indian companies overseas in the past 50 years, leading to about 10 million tonnes of oil equivalent.

While Vankor produces about 4,42,000 barrels of oil per day (bpd) -- that is, 4 percent of Russian crude oil production -- Taas produces about 21,000 barrels per day of oil, and a peak of 1,00,000 bpd is expected by 2021.


Published Date: Jun 26, 2017 12:29 pm | Updated Date: Jun 26, 2017 12:29 pm