The company signed a deal with Rosneft Oil Company to acquire the additional 11 per cent stake in the East Siberian field for $930 million on October 28.

 

"We raised a bridge loan of $930 million from overseas lenders to pay for the acquisition cost of 11 per cent stake," ONGC Videsh CEO and managing director Narendra K Verma said here.  

 

OVL, which had previously bought a 15 per cent stake in Vankor from Russian national oil firm Rosneft for $1.268 billion, will get an 7.3 million tonnes of oil equivalent from its 26 per cent stake.

 

OVL will tie up long-term financing in the next six to nine months to replace the bridge loan, he said.

 

Besides OVL's 26 per cent, a consortium of comprising Oil India (OIL), Indian Oil Corporation (IOC) and Bharat PetroResources (BPRL) has acquired a 23.9 per cent stake in the field at a cost of $2.02 billion, giving them 6.56 million tonnes of oil.

 

After the stake sales, Rosneft holds a 50.1 per cent stake in JSC Vankorneft, the company that operates the Vankor oilfield.

 

Verma and Igor Sechin, CEO, Rosneft, had on September 14 in Moscow inked an agreement to take the additional equity stake in Vankor. That agreement was subject to certain conditions including approvals from the Indian and Russian governments.

 

All approvals are in place, leading to closure of the deal, he said. "The completion within very short period of the binding agreement reflects the speed and cooperation with which both OVL and Rosneft have moved and the support that the investments by Indian companies in Russian oil sector enjoy with the Russian and Indian governments."

 

Vankor is Rosneft's (and Russia's) second largest field by production and accounts for 4 per cent of the country's production.

 

The daily production from the field is around 410,000 barrels per day of crude oil and 26 per cent stake would give OVL about 107,000 bpd.

 

"The acquisition of additional 11 per cent would add about 30 per cent to the existing OVL's production at the current rate and approximately 2.2 million tons of oil and 1.0 billion cubic meters of gas annually," he said. 

 

The field has recoverable reserves of 2.5 billion barrels.

 

The $2.2 billion OVL spent for acquiring 26 per cent stake in Vankor will be its third biggest acquisition. It had in 2013 paid $4.125 billion for a 16 per cent stake in Mozambique's offshore Rovuma Area 1, which holds as much as 75 trillion cubic feet of gas reserves.

 

In 2009, it had bought Russia-focused Imperial Energy for $2.1 billion. Prior to that, it had in 2001 paid $1.7 billion for 20 per cent interest in the Sakhalin-1 oil and gas field off Russia's far eastern coast.