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Rosneft and ONGC Videsh Limited are completing the Preparation to Close the Deal for the Acquisition of an Additional stake of 11% share in Vankorneft JSC
15 October 2016Rosneft and ONGC Videsh Limited signed within the BRICS summit an Agreement on the preparation for the completion relating to the sale and purchase agreement of 11% shares in Vankorneft JSC. The document was signed in the presence of the President of the Russian Federation Vladimir Putin and the Prime-Minister of the Republic of India Narendra Modi by Rosneft Chief Executive Officer Igor Sechin and ONGC Videsh Limited Managing Director Narendra Verma.
The base price of the transaction is c. USD 930 mln.
Previously the deal was approved by the Governmental Commission for Control over Foreign Investment in the Russian Federation and the Cabinet Committee of Economic Affairs (CCEA) of the Republic of India. Rosneft and ONGC Videsh Limited aim to close the deal by the end ofOctober 2016.
Rosneft finalizes the creation of an international energy hub on the basis of the Vankor cluster within short timeframes: on October,5 the Company successfully closed the transaction to sell 23.9% shares in Vankorneft JSC to a Consortium of Indian companies, consisting of Oil India Limited (the leader of the consortium), Indian Oil Corporation Limited and Bharat PetroResources Limited. On May, 31 Rosneft closed the deal to sell 15% shares in Vankorneft JSC to ONGC Videsh Limited.
After the closing of the deal to purchase an additional 11% in Vankorneft JSC ONGC Videsh Limited’s share in Vankorneft JSC will reach 26%. Consequently the share of Indian state companies will increase to 49.9%.
The achieved evaluation of Vankor Project is USD 3.4 per barrel of hydrocarbon reserves (in terms of 2P category using PRMS method) and reflects high potential of the project’s resource base.
Additionaly within the BRICS summit Rosneft and an expanded consortium, comprising five Indian state companies (Oil India Limited, Indian Oil Corporation, Bharat PetroResources Limited, ONGC Videsh Limited and Hindustan Petroleum Corporation Limited) announced to extend the cooperation within the joint implementation of oil and gas projects in Russia. The Parties aim to soon commence negotiations for the possible acquisition of shares in the Suzun, Tagul and Lodochnoe fields, viewing them as a single asset.
Note for editors:
Rosneft subsidiary Vankorneft was established in 2004 to develop Vankor oil and gas condensate field - the largest of the fields, discovered and commissioned in Russia during the last twenty five years. The field is located in the North of Eastern Siberia in Turukhansk District of the Krasnoyarsk Territory 142 km away from Igarka town.
As of 01.01.2016 Vankor field 2P reserves by PRMS classification are 265 mln tons of oil and condensate and 88 bcm of gas.
22 mln tons of oil and 8.71 bcm of gas were produced at Vankor in 2015. Vankor recovery factor is one of the highest in Russia due to the applied technological solutions. High flow rate of the field is secured by the drilling of injection directional and producing wells with horizontal completion. Oil production process is fully automated.
In April 2016 an operator company RN-Vankor was created which controls the regional infrastructure of Vankor cluster (including Vankor-Purpe oil pipeline) and enhances the efficiency and transparency of management of the project.
Rosneft Information Division
Tel.: + 7 (499) 517-88-97
October15, 2016
These materials contain statements about future events and expectations that are forward-looking in nature. Any statement in these materials that is not a statement of historical fact is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements expressed or implied by such forward-looking statements to differ. We assume no obligation to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements.