New Delhi: Russian government has approved ONGC Videsh Ltd's deal to buy 15 per cent in the country's second biggest oil field of Vankor from Rosneft for USD 1.268 billion.
OVL, the overseas arm of the state explorer Oil and Natural Gas Corp (ONGC), had in September last year signed an agreement to buy 15 per cent stake in Vankorneft, the developer of the Vankor oil and gas condensate field in Turukhansky district of Krasnoyak Territory in Russia. "We have received approval of the Federal Antimonopoly Service (FAS) for the deal," OVL Managing Director Narendra K Verma told PTI here.
With this, all approvals for the deal are in place and Rosneft now has to restructure Vankorneft by giving OVL board positions and carving out the Vankor fields into a separate company, all of which is expected to be completed by June.
This month, OVL signed an initial agreement to raise its stake in Vankor to 26 per cent from 15 per cent, while three other state companies -- Indian Oil Corp (IOC), Oil India Ltd (OIL) and Bharat Petroleum Corp Ltd (BPLC) would together pick up 23.9 per cent.
"We are not very clear if the additional stake would also need FAS approval," he said adding the price for the additional stake is yet to be finalised.
Vankor is OVL's fourth biggest acquisition ever. Vankorneft, a subsidiary of Rosneft, was founded in 2004 to carry out the project of the Vankor field development, the largest field to have been discovered and brought into production in Russia in the last 25 years.
It is located in the northern part of Eastern Siberia, in Turukhansky District of Krasnoyarsk Territory, 142 km from Igarka.
As of January 1, 2015, the initial recoverable reserves in the Vankor field are estimated at 476 million tonnes of oil and condensate, and 173 billion cubic meters of gas. The area of the Vankor field is 447 square kilometers. Oil and gas condensate production in 2015 was 22 million tons.
The 15 per cent stake will give OVL 3.3 million tonnes per annum of oil production.
Prior to the deal, Rosneft, Russia's national oil company, held 100 per cent stake in Vankorneft.
This will be the fourth biggest acquisition by OVL. It had in 2013 paid USD 4.125 billion for a 16 per cent stake in Mozambique's offshore Rovuma Area 1, which holds as much as 75 Trillion cubic feet of gas reserves.
In 2009, it had bought Russia-focused Imperial Energy for USD 2.1 billion. Prior to that, it had in 2001 paid USD 1.7 billion for a 20 per cent interest in the Sakhalin-1 oil and gas field off Russia's far eastern coast.
Vankor is Rosneft's (and Russia's) second largest field by production and accounts for 4 per cent of Russian production. The daily production from the field is around 442,000 barrels per day of crude oil on an average with OVL's share of daily oil production at about 66,000.
Upon completion of the deal, OVL will have two seats on the board of Vankorneft, Rosneft said.