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Share Price: 510.40
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Change: -5.40 (-1.05%)
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UPDATE 1-India's Essar Group, Rosneft to sign 10-year oil deal- sources

Wed, 10th Dec 2014 14:23

* Essar, Rosneft to sign deal during Putin visit - sources

* Oil India to sign energy pact with Zarubezhneft - sources (Adds more details)

By Nidhi Verma

NEW DELHI, Dec 10 (Reuters) - India's Essar Group will signa long-term crude oil import deal with Russia's Rosneft during President Vladimir Putin's visit to New Delhion Thursday, government and industry sources said on Wednesday.

"Essar will sign an MoU (memorandum of understanding) withthem (Rosneft)," two Indian government sources said. "The dealwill be for 10 years," an industry source familiar with thematter said.

Essar Group operates the 405,000 barrels per day (bpd)Vadinar refinery in the western state of Gujarat and also the296,000 bpd Stanlow refinery in northwest England which isoperating at below its capacity.

Volumes, pricing and other details of the deal withstate-controlled Rosneft, the world's largest listed oil firm byoutput, were not immediately known. Essar depends heavily onIran to feed its Vadinar refinery.

In January, sources told Reuters that Russia and Iran werenegotiating an oil-for-goods swap deal.

Russian Economy Minister Alexei Ulyukayev was quoted on Nov.30 as saying the deal with Iran might be sealed soon. Iran OilMinister Bijan Zanganeh on Wednesday said there was no such planin prospect.

Russia, isolated by the West over its annexation of Crimeaand role in the Ukraine crisis, has a close relationship withIndia that dates back to the Soviet era.

India and Russia are expected to issue a joint statementaimed at strengthening the energy partnership between the twocountries.

State-run explorer Oil India Ltd will also sign aninitial deal with Russia's state-owned Zarubezhneft to cooperatein the hydrocarbons sector, sources said.

Oil India will explore hiring the Moscow-based firm'sdrilling vessel Deep Venture and seek Zarubezhneft's help inextracting heavy oil from the Indian firm's Rajasthan block.

An Essar spokesman declined to comment. Oil India chairmanS.K. Srivastava declined comment. Rosneft could not beimmediately reached for comment.

(Reporting by Nidhi Verma; Editing by Douglas Busvine and JaneMerriman)

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