Rosneft Sells Stake In Oil Fields To Indian Companies Amid Debt, Low Oil Prices

Russia’s state-owned oil giant Rosneft signed agreements Wednesday to sell 49.9 percent stakes in two of its Siberian oil fields to four Indian state-run oil companies. The deals could give over $4 billion to Rosneft, which, amid Western sanctions, is struggling to pay off debts following its $55 billion acquisition of the Russian TNK-BP oil company in 2013.

A consortium of three Indian companies — Oil India, Indian Oil and Bharat PetroResources, a subsidiary of Bharat Petroleum — signed an agreement with Rosneft to buy 23.9 percent stake in the Vankor oilfield for just over $2 billion, Press Trust of India news agency reported. Another Indian firm, Oil and Natural Gas Corporation, signed an agreement with Rosneft to increase its stake in Vankor to 26 percent from the current 15 percent. According to PTI, the deal was valued at $925 million.

In a separate deal, the consortium of Indian companies is also buying a 29.9 percent stake in Rosneft’s Taas-Yuriakh subsidiary — one of the largest oil and gas fields in eastern Siberia — according to reports. Officials told PTI that the deal value was $1.28 billion.

Taas-Yuriakh currently produces 20,000 barrels of oil per day (bopd), with expected peak production of 100,000 bopd by 2021, Indian Oil said in a statement.

Rosneft is also in talks with India’s Essar Oil to buy 49 percent stake in the private company. The deal is likely to be announced by June, according to a statement by Essar.

Preliminary agreements between the countries were signed in December during Indian Prime Minister Narendra Modi’s visit to Moscow.

“Indian companies are gaining access to oil production projects in Russia, and Rosneft is gaining an opportunity to operate on the Indian market,” Rosneft CEO Igor Sechin said Wednesday in New Delhi, adding that the deals would form a reliable energy bridge between the two countries, RT.com reported.

India, the world’s fourth-biggest oil consumer, is seeking oil investments abroad to ensure energy security amid unstable crude prices. Conversely, Rosneft is looking to Asia for investment after Russia was slapped with Western sanctions over its 2014 annexation of Crimea. Russia is heavily dependent on oil revenues and the decline in oil prices has affected its economy severely.