Russia's Rosneft Signs Deal to Buy into India's Essar Oil
UFA, Russia, July 9 (Reuters) – Russia's top oil producer Rosneft has taken a significant step towards expanding its global reach by signing a preliminary deal to acquire up to 49 percent in Essar Oil Ltd, India's second biggest private refiner.
Rosneft had initially said it would buy into Essar's Vadinar refinery. But a company spokesman clarified on Thursday the deal included Rosneft entering into Essar Oil's charter capital, echoing a statement from the Indian firm.
The companies have signed a non-binding term sheet for Rosneft to buy an equity stake of up to 49 percent in Essar Oil, the Indian company said in a statement on Thursday.
Rosneft, the world's top listed oil producer, has long sought to increase its exposure to the global markets but its efforts have been hampered by Western sanctions over Moscow's role in the Ukraine crisis.
The deal with Essar from India, a country Russia has close ties with since the Soviet era, was announced as Indian Prime Minister Narendra Modi met President Vladimir Putin on the fringes of a summit of emerging nations.
Rosneft said on Wednesday that it had also finalised a deal to supply 10 million tonnes of oil a year, or 200,000 barrels per day, to Essar's Vadinar refinery over 10 years.
"Thanks to this agreement Rosneft grants itself a secure market outlet of crude oil, which will create an additional possibility of production planning and marketing," the company said in a statement.
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