Russia approves ONGC's Rs 8,600-crore Vankor oilfield deal

Russia has approved ONGC's deal to pick up 15% stake in Russia's second biggest oil field, Vankor from Rosneft, Interfax news agency has said.

A deal that will cost $1.3 billion (nearly Rs 8,648.5 crore) will give India access to Russia's oil supply, and will give Russian company Rosneft access to the Indian market. 

The field, which has recoverable reserves of 2.5 billion barrels, will give ONGC Videsh Ltd 3.3 million tonnes per annum of oil production. It's also a source of oil for the Chinese market.

The Vankor oil field, set up in 2004, is the largest oil field that has been discovered and brought to production in Russia in the last 25 years, ONGC said in a statement.

Earlier this month, ONGC Videsh and Rosneft signed a Memorandum of Understanding (MoU) for the acquisition of 11% more shares in addition to the 15% shares for which definitive agreements have already been signed in September, ONGC informed the BSE on March 17. Post this, OVL will be picking up 26% stake against the earlier 15%.

Currently, the company has received a nod from Russia to pick up the initial 15% stake. 

"Vankor is Rosneft's (and Russia's) second largest field by production and accounts for 4% of Russian production. The daily production from the field is around 442,000 barrels per day of crude oil on an average with OVL's share of daily oil production at about 66,000," OVL said.

On March 23, the company's share price closed down 0.81% at Rs 214.55, down Rs 1.75 from previous day's close. Markets have been shut on March 25 and 25 for Holi and Good Friday holidays.