NEW DELHI: ONGC Videsh Ltd has raised $1 billion through a US dollar bonds issue to finance its acquisition of 15 percent stake in Russia’s second biggest oil field Vankor.
OVL, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), raised $600 million through a 10-year bond at a coupon rate of 3.75 percent and another $400 million through a 5.5-year maturity bond at an interest rate of 2.875 percent, company’s Director (Finance) S P Garg said.
The proceeds of the issue would go to refinance a $1.2 billion bridge loan the company had taken from a group of foreign banks to make payments for the $1.268 billion acquisition.
“We will draw down the bonds sometime next week,” he said.
The bridge loan was taken in May this year at a highly competitive rate of about 1.3 percent.
The interest rate is lower than 4.625 percent OVL had paid on a $2.23 billion 10-year bond issue in July 2014 to finance its Mozambique gas field acquisition.
OVL had signed the agreement to buy 15 per cent stake in Vankorneft, the developer of the Vankor oil and gas condensate field in Turukhansky district of Krasnoyarsk Territory in Russia.
In March this year, it signed an initial agreement to buy an additional 11 percent. That deal is yet to close, he said.
Vankor, the largest field to have been discovered and brought into production in Russia in the last 25 years, is located in the northern part of Eastern Siberia.
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 tonnes.
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 percent stake in Vankorneft.
This is the fourth biggest acquisition by OVL. It had in 2013 paid $4.125 billion for a 16 percent stake in Mozambique’s offshore Rovuma Area 1, which holds as much as 75 trillion cubic feet of gas reserves.
With daily output of 442,000 barrels per day, Vankor accounts for 4 per cent of Russian production.
