India plans to sign energy deals with Russian oil major Rosneft next week to buy stakes in Siberian fields, two sources privy to the deal said, as New Delhi accelerates a push to secure overseas energy assets.
India, the world’s third biggest oil importer, has to ship in three quarters of its oil needs and a substantial fall in oil prices has added an extra incentive to seal purchases of assets that are now relatively cheap to limit its reliance on imports.
Rosneft’s Chief Executive Igor Sechin will visit Delhi on March 15-16 to stitch together the deals, the sources said.
Rosneft, the world’s biggest listed oil company by output, also stands to benefit as it has been scouting for partners as Western sanctions tied to Russia’s annexation of Crimea have limited its access to global funds and technology.
Russia is keen to develop and deepen its economic ties with India, one of the world’s fastest-growing economies, when its own economy is stagnant, hit by Western sanctions and a plunge in global oil prices.
During Sechin’s visit, an agreement is likely to be signed with Indian Oil Corp, Oil India Ltd and Bharat PetroResources Ltd (BPRL) for a 29 percent stake in the Taas-Yuriakh oil field, the sources said.
In December, IOC and Oil India signed a memorandum with Rosneft, which paves the way for acquisition of a stake in Taas-Yuriakh oil assets in East Siberia.
Later BPRL, the exploration arm of Bharat Petroleum Corp, joined the negotiations.
Taas-Yuriakh, which operates the Srednebotuobinsk field in east Siberia, is expected to produce more than 5 million tonnes of oil annually in the medium term.
Rosneft last year sold a 20 percent share in Taas-Yuriakh to BP for $750 million, and based on that valuation a 29 percent stake could be worth around $1 billion.
India also wants to raise its overall stake in the Vankor oil field in Siberia to 49.9 percent from the current 15 percent.
ONGC Videsh Ltd (OVL) is expected to sign a memorandum of understanding (MoU) with Rosneft to raise its stake in the Vankor field in Siberia to 26 percent from the current 15 percent, they said.
IOC, Oil India and BPRL may sign an MoU for buying an additional 23.9 percent stake in the Vankor project, they said.
The sources said the sale purchase agreement for raising the stake in Vankor field will be signed in June at International Economic Forum in St. Petersburg.
Oil India chairman and managing directors of ONGC Videsh and BPRL did not respond to Reuters’ phone calls seeking comment, while no comment was available from Rosneft.