OVL Current Affairs - 2019
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The Cabinet Committee on Economic Affairs (CCEA) has given approval ONGC Videsh Limited (OVL) proposal to buy 11% stake in JSC Vankorneft.
OVL will buy this stake in JSC Vankorneft from Rosneft Oil Company (Rosneft), National Oil Company of Russia which operates Vankor oil fields.
OVL will pay US 930 million dollars for acquiring 11% stake in Vankorneft. This acquisition is also in line with ONGC’s stated objective of adding high quality international assets to India’s Exploration and Production (E&P) portfolio for augmenting India’s energy security.
- Provide OVL 3.2 Million Metric Ton of Oil Equivalent (MMTOE) by 2017.
- Provide opportunity to Indian Oil and Gas companies especially PSUs to acquire new technologies from Rosneft.
- Earlier in May 2016, OVL had completed the formalities on acquisition of 15% stake in Vankorneft at a cost of US 1.284 billion dollars which gave OVL 4.11 MMTOE.
- Besides, consortium of Indian oil companies comprising of Indian Oil Corporation Limited (IOCL), Oil India Limited (OIL) and Bharat PetroResources Limited (BPRL) had acquired 23.9% stake in Vankorneft at a cost of US 2020.35 million dollars which gave them 6.56 MMTOE.
The Russian Government has approved a deal of ONGC Videsh Ltd (OVL) to acquire 15% stake in Vankor oilfield from Rosneft.
The deal was signed between the OVL and Rosneft in September 2015 and is worth 1.3 billion US dollars. Vankor is Russia’s second biggest oil field with capacity of total 2.5 billion recoverable reserves barrels (or 500 million tonnes).
As per the deal
- OVL’s stake in Vankor will raise to 26% from 15% and will give it about 3.5 million metric tonnes of oil a year
- Consequently, Rosneft will retain the remaining 50.1 per cent and also retain full control of infrastructure of the Vankor cluster.
This deal is in addition to another deal that was signed in March 2016 between the OVL and three other oil companies. Both of these deals will help India to secure access to lucrative Russia’s oil market, while Rosneft in turn will through OVL gain access to the Indian market.
Vankor oilfield was discovered in 1988 and is main source supplier to the East Siberia Pacific Ocean (ESPO) Pipeline that is key contributor to the energy needs of China.