Russia’s monopoly watchdog approves ONGC’s application to acquire 15 percent in Vankorneft – report

Russia’s Federal Antimonopoly Service (FAS) has approved Indian ONGC’s application to acquire a 15 percent stake in Rosneft subsidiary Vankorneft, Tass news agency said on its website.

“The application from ONGC has been approved,” a source in FAS told Tass.

The decision on preliminary approval of the deal has been submitted to the company, the regulator said. “The transaction is important from the viewpoint of attracting foreign investment in the Russian economy and will obviously strengthen the partnership relations between Russia and India,” Tass quoted head of FAS Department for Control over Foreign Investments Armen Khanyan as saying.

On March 24, the government commission on monitoring foreign investment approved the acquisition of a stake in Rosneft’s Vankorneft by the Indian ONGC.

Head of the Federal Antimonopoly Service Igor Artemyev then said that ONGC would pay $1.3 bln for a stake in Vankorneft.

Rosneft inked an agreement with Indian state-owned ONGC on sale of a 15% stake in Vankor last September.

The deal stipulates two seats in Vankorneft board of directors for ONGC, with Rosneft keeping control over the Vankor cluster infrastructure, Tass reported.

Last month, Rosneft signed a memorandum of understanding with ONGC Videsh Limited for cooperation in the Vankor project, which stipulates the prospective increase to 26 percent of the share of the Indian company in Vankroneft. The document also oversees the analysis of the joint trading development’s potential, including the possibility of entering into long-term crude-oil supply contracts, Tass said.

Rosneft, Oil India, Indian Oil and Bharat Petroresources also signed a heads of agreement in respect to the acquisition by a group of Indian investors of a 23,9% share in Vankroneft.

Vankorneft, a subsidiary of Rosneft, was founded in 2004 to carry out the project of the Vankor field development, the largest field to have been discovered and brought into production in Russia in the last 25 years. It is located in Eastern Siberia.

The initial recoverable reserves in the Vankor field are estimated at 476 million tons of oil and condensate, and 173 bilion cubic meters of gas.

 

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