As reported by Indianmandarins, national oil companies on Wednesday signed energy deals worth billions of dollars with Russia’s Rosneft to buy into its most promising assets in Siberia. Prime Minister Narendra Modi, who wants to cut India’s oil imports by 10 percent in six years, is steering efforts to buy foreign energy assets, taking advantage of low global oil prices and a slowdown in China’s overseas acquisitions.
Under the deals signed with Rosneft CEO Igor Sechin, the Indian companies will raise their stake in the Vankor oil field to almost 50 percent and buy about 30 percent of the Taas-Yuriakh field. The deals will help Rosneft, the world’s biggested listed oil producer by output, to pay off debts incurred in its $55 billion acquisition of TNK-BP in 2013.
Russia is keen to develop and deepen its Soviet-era economic ties with India and sell oil to one of the world’s fastest-growing economies at a time when its own economy is stagnant, hit by Western sanctions and a plunge in global oil prices.
Modi had pitched to Russian President Vladimir Putin for the granting of stakes to Indian oil firms during his visit to Moscow in December. The deals will help India to secure Russian oil output, while Rosneft will gain access to the Indian market, Sechin told reporters in New Delhi.
Sechin met Essar Oil officials during his visit and said that Rosneft hopes to conclude a deal to buy a 49 percent stake in the 400,000 barrel-per-day Vadinar refinery in western India by the end of June. The proposed deal would give Rosneft an additional outlet for its oil as it grapples with a global crude supply glut.