17 Jun 2016 15:15
Rosneft and a Consortium of Indian Investors Signed Agreements to Affiliate the Vankor Project
Rosneft and Consortium of Indian Companies led by Oil India Limited along with Indian Oil Corporation Ltd. and Bharat PetroResources Limited have signed the agreement of sale and purchase of 23.9% in Vankorneft and the shareholders agreement at the XX St. Petersburg International Economic Forum. The document was signed in the presence of the Minister of Energy of Russia Alexander Novak and the Minister of petroleum and natural gas of India Dharmendra Pradhan by Rosneft Chief Executive Officer Igor Sechin, Oil India Limited Director Biswajit Roy, Indian Oil Corporation Chairman B Ashok, and Bharat Petroleum Managing Director D Rajkumar.
The closing of the transaction will be performed upon obtaining the necessary regulatory and additional approvals.
After the closing of the transaction consortium representatives will enter the Board of Directors of Vankorneft. Rosneft will hold the majority in the project, retain the control over the operations of the named company and over 100% of the cluster's infrastructure (including the Vankor-Purpe pipeline), which was spin-off in the RN-Vankor LLC.
The implementation of the signed agreements together with the earlier closed transaction for the purchase of a 15% share in Vankorneft by ONGC Videsh Limited subsidiary will allow creating a unique consortium on the basis of the Vankor project.
The creation of an international energy hub will significantly amplify the production potential of the Vankor cluster. The potential organization of joint trade operations will allow solidifying positions of Russian energy resources in a highly competitive environment of the Asia Pacific region and will have a positive effect on the stabilization of the market.
Commenting on the signed documents Igor Sechin said: "Today we signed agreements aimed at the creation of an unprecedented Russian-Indian corporate entity. It is worth noting that the signed complex documents were structured within a very tight schedule, which demonstrates the commitment of the parties. The vertically integrated model to be created based on a leading upstream asset in Russia marks a new page in the energy dialogue between Russia and India".
Notes for editors:
Vankorneft, Rosneft subsidiary, was established in 2004 for development of Vankor oil and gas condensate field - the largest of the fields, discovered and put into operation in Russia in the last 25 years. The field is situated in the Turukhansky district of Krasnoyarsk Territory, 142 km away from the city of Igarka.
Recoverable resources of the Vankor field as of 01.01.2016 stood at 361 mln t of oil and condensate and 138 bcm of gas.
In 2015 Vankor produced 22 mln tons of oil and 8.71 BCM of gas. Thanks to implemented technological solutions, oil recovery factor at Vankor is one of the highest in Russia. The field is drilled with the inclined- and production- injection wells with horizontal ending which provides high well flow rates. The process of oil production is fully automated.
On March 16 2016 Rosneft, Oil India, Indian Oil and Bharat Petroresources signed a Heads of agreement in respect to the acquisition by a group of Indian investors of a 23.9% share in Vankroneft.
On May 31 2016 Rosneft Oill Company and ONGC Videsh Limited have closed the transaction of selling 15% shares in Vankorneft JSC to an Indian company. The achieved evaluation of Vankor Project is USD 3.3 per barrel of hydrocarbon reserves (in terms of 2P category using PRMS method) and reflects high potential of the project's resource base. With account for the achieved evaluation coefficients, the design value of hydrocarbon reserves of Rosneft exceeds current market capitalization of the Company more than twice.
Rosneft Information DivisionTel: + 7 (499) 517-88-97Thursday, June 18, 2016
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