Indian consortium eyes 49% stake in Russia’s Vankor oilfield

A consortium of state-owned oil companies led by Oil India Ltd (OIL) is looking to acquire up to 49 per cent stake in Russia's Vankor oilfield cluster to consolidate Indian presence in the energy-rich Arctic region.

OIL, Indian Oil Corp (IOC) and Bharat PetroResources Ltd (a unit of Bharat Petroleum Corp Ltd or BPCL) plan to buy a stake in Russia's Suzunskoye, Tagulskoye and Lodochnoye fields, collectively known as Vankor Culster, reports quoting sources close to the development said.

Reports say ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), is also interested in the fields.

Russia's national oil company Rosneft, which owns the fields, is keen to sell up to a maximum 49 per cent stake in the Vankor Cluster, while it retains controlling stake of 51 per cent.

In case OVL is accommodated, the entire 49 per cent stake would have to be split between the Indian companies. In that event, OVL, which had earlier acquired a 26 per cent stake in the main Vankor oil field, may possibly take up a proportionate stake of around 25 per cent in the Vankor Cluster as well, reports say.

The OIL-IOC-BPRL consortium may take up to 23.9 per cent stake in line with its holding in the main Vankor field.

Vankorneft, a subsidiary of Rosneft, is developing the Vankor oil and gas condensate field, located close to the Vankor field in the northern part of Eastern Siberia.

The three oilfields in the Vankor cluster - Suzunskoye, Tagulskoye and Lodochnoye – holds rserves of both oil and condensate as well as gas.

The reserves of Suzunskoye field are estimated to exceed 56 million tonnes of oil and condensate, and 35 billion cubic meters of gas.

OVL in May completed acquisition of 15 per cent stake in the Vankor min oilfield, Russia's second biggest oilfield, for $1.268 billion. It last week got government nod to raise the stake by a further 11 per cent at an investment of $930 million. The 26 per cent stake would give OVL 7.31 million tonnes of oil. The consortium of OIL-IOC-BPRL acquired 23.9 per cent stake in the field at a cost of $2.02 billion, giving them 6.56 million tonnes of oil.

Rosneft continues to hold the remaining 50.1 per cent shares of JSC Vankorneft. The field has recoverable reserves of 2.5 billion barrels. Besides, the OIL-IOC-BPRL consortium has taken another 29.9 per cent stake in a separate Taas-Yuryakh oilfield in East Siberia for $1.12 billion.

Indian companies have invested a total of $5.46 billion in Russia this year securing annual supplies of 15.18 million tonnes of oil equivalent. Against this, Indian companies invested $28.48 billion in overseas oil assets in the past 50 years, giving India about 10 million tonnes of oil equivalent.

Vankor accounts for about 442,000 barrels of oil per day (4 per cent of Russian crude oil production) while Taas currently produces about 21,000 barrels per day of oil, and a peak of 1,00,000 bpd is expected by 2021.