Russian oil giant Rosneft confirms will buy into India’s Essar Oil

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Russia’s Rosneft said it will buy a stake in Essar Oil Ltd in a deal that is expected to be closed in the next four months.

“During the visit to India Rosneft Chairman of the Management Board Igor Sechin has held negotiations with the Management of Essar. Preliminary mutual understanding has been achieved on the timing and structure of a deal to buy into the equity of Essar Oil Limited,’ Rosneft said in a statement.

It said that the two parties intend to sign and close the transaction by the end of June 2016 upon obtaining all necessary permits.

“In addition an agreement on crude oil deliveries to commence this year has also been achieved, the statement added.

The Hindu Businessline news paper said that the deal for a 49 percent by Rosneft was valued at $2.4 billion.

Essar’s Vadinar refinery — the second largest in India and one of a top ten world’s best refineries currently — has a capacity of annual process 20 million tonnes of crude.

Rosneft said the refinery is highly flexible in terms of raw materials use and is capable of refining heavy and sour oil grades. Essar Oil Limited plans to implement the modernization program expanding the refinery’s capacity up to 25 million tonnes per annum including production of 1 million tonnes per annum of propylene/polypropylene.

Essar Oil Limited also owns an operational network of 2,000 fueling stations in India. The company’s plans include expanding the network up to 5,000 stations. Deregulation of pricing at the Indian retail market opens perspective of retail sales growth, the statement added.

 

 

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