ONGC Videsh in Talks to Acquire Stakes in 2 Fields in Siberia

ONGC Videsh Ltd. (OVL), the overseas-focused upstream division of India's state-owned Oil and Natural Gas Corporation Ltd. (ONGC), has commenced discussions with Rosneft to acquire interests in two Siberian fields in Russia, the country's oil minister Dharmendra Pradhan said, as quoted in local daily The Economic Times Wednesday.

OVL "is in discussions with a Russian oil company for acquiring participating interest in two Siberian oil fields ... Discussions are at a preliminary stage," he said in a written reply to a question in Rajya Sabha -- the upper house of India's parliament.

While Oil Minister Pradhan did not reveal which fields were involved in the discussions, sources cited by The Economic Times revealed that stakes for sale involved the Vankor and Yurubcheno-Tokhomskoye fields.

An agreement was to have been signed by Rosneft and OVL for the sale of stakes in the two fields during Russian President Vladimir Putin's visit to India in December 2014, but differences between the two parties prevented a formal signing of the deal, the sources added.

Russia's biggest hydrocarbon firm Rosneft had earlier offered to sell a 10 percent interest in the northern Siberia's Vankor field, which commenced production in August 2009 and produced 153.1 million barrels of oil and 231.25 billion cubic feet or 6.55 billion cubic meters (Bcm) in 2013, to OVL. The field holds an initial recoverable reserves of 500 million tons of oil and 6.42 trillion cubic feet (182 Bcm) of gas.

In November 2014, Rosneft confirmed that it has sold 10 percent stake in the Vankor cluster fields to China National Oil & Gas Exploration Development Corporation, a subsidiary of China National Petroleum Corp. (CNPC), for around $1 billion.

In addition to Vankor, Rosneft has proposed to OVL to jointly develop the Yurubcheno-Tokhomskoye field, which holds the largest gas reserves in East Siberia.

The field, operated by East-Siberian Oil and Gas Company was formerly owned by Yukos, which was acquired by Rosneft at an auction in May 2007.

Hydrocarbon reserves at the Yurubcheno-Tokhoskoye field is estimated at around 991 million barrels of oil equivalent, with production planned to start in 2017, The Economic Times reported, adding that peak production from the field is expected to reach up to 5 million tons a year or 100,000 barrels per day in 2019.

OVL, focused on supporting India's energy security through overseas participation in oil and gas exploration and production activities, has been involved in Russia's hydrocarbon sector since July 2001, when the company acquired a 20 percent stake in Sakhalin-1 oil and gas field in the country's Far East.

The Indian upstream firm increased its investment in Russia's upstream sector when it acquired Imperial Energy Corporation PLC., an independent upstream oil exploration and production company with its main activities focused on the Tomsk region of Western Siberia, Russia in January 2009 for $2.1 billion.


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