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Rosneft-Essar deal not in violation of sanctions on Russia: US

Washington: Russia's state-controlled oil giant Rosneft and its partners' USD 12.9 billion deal to take over India's Essar Oil is not in violation of any US-EU sanctions against Russia, the US said today.

essar"I don't think we see any violation of any US or EU sanctions stemming from this deal," State Department Deputy Spokesman Mark Toner told reporters at his daily news conference, when asked about the deal announced during BRICS Summit in Goa last week.

Economic sanctions have been imposed on Russia for its actions in Crimea and eastern Ukraine.

The deal was announced on October 15 after Prime Minister Narendra Modi met Russian President Vladimir Putin during a meeting of the leaders of the BRICS countries (Brazil, Russia, India, China and South Africa).

"We've seen the reports in general about this oil deal. I'd refer you to the governments of India and Russia," he said.

In the largest inflow of foreign direct investment in India, Rosneft bought a 49 per cent stake in Essar Oil's refinery, port and petrol pumps while Netherlands-based Trafigura Group Pte, one of the world's biggest commodity trading companies, and Russian investment fund United Capital Partners split another 49 per cent equity equally.

The remaining 2 per cent will be held by minority shareholders after delisting of Essar Oil.

The acquisition is the biggest in India and largest outbound deal for Russia. The all cash deal is expected to close in first quarter of 2017.

Essar Oil, part of a steel-to-ports conglomerate controlled by the billionaire Ruia brothers, operates a 405,000-barrels-a-day refinery at Vadinar in Gujarat. The refining complex also has a captive power plant as well as a port and terminal facilities.


Updated Date: Oct 19, 2016 16:02 PM

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