NEW DELHI: Indian state oil firms may buy a stake in Russian oil major Rosneft, oil minister Dharmendra Pradhan said, signaling a move that would hoist the country’s overseas energy portfolio to a new high as the company pumps more oil than ExxonMobil.
Russia is seeking buyers for 19.5% stake estimated to be worth $11 billion in Rosneft, which accounts for more than 40% of Russian oil production. It produces 205 million tonnes of crude oil a year, while India pumps about 37 million tonnes. Russia is searching for strategic partners at a time when low oil prices and Western sanctions are pinching the country.
“Our companies are evaluating if we can invest in Rosneft,” Pradhan said, without elaborating on the stake, price or companies involved in it. Russia is hoping to raise $11 billion from the sale and would prefer a joint deal with India and China, Bloomberg had reported this week.
BP owns nearly a fifth of Rosneft. This is the latest in a slew of energy deals India and Russia have been stitching over the past year. As its fuel consumption rises rapidly in an expanding economy and local production continues to decline, India is increasingly looking out for oil and gas resources and finding greater success in acquiring producing assets in Russia, its long-time ally.
State-run Oil and Natural GasBSE -4.32 % Corp (ONGC) has recently paid $1.27 billion for a 15% stake in Rosneft’s Vankor field, the second-largest oil field in Russia. ONGC is in talks to raise this further to 26%. Another state firm consortium comprising Indian OilBSE -2.49 %, Oil IndiaBSE -2.33 %, and Bharat Petroleum has agreed to purchase 23.9% stake for about $2 billion in Vankor. With the conclusion of these deals, Indian stake in Vankor will go up to 49.9%.
The consortium has also agreed to buy 29.9% in Rosneft’s Taas-Yuryakh field in Russia for $1.3 billion. With all these deals, India will end up investing about $5.5 billion in the Russia oil and gas sector.