Rosneft Current Affairs - 2019
Category Wise PDF Compilations available at This Link
Russian consortium led energy giant Rosneft Oil Company has agreed to acquire India’s second biggest private oil firm Essar Oil in an all-cash deal valued at about US $13 billion.
The consortium includes Rosneft Oil Company, Netherlands-based commodities trader Trafigura and private investment group United Capital Partners.
The business transaction was announced in the presence of Prime Minister Narendra Modi and Russian President Vladimir Putin at the 8th BRICS Summit in Goa.
Under this deal
- Rosneft bought a 49% stake in Essar Oil’s refinery, port and petrol pumps, while Trafigura Group Pte and United Capital Partners split 49% equity equally.
- It includes $10.9 billion for Essar Oil’s Vadinar refinery (India’s second-largest refinery with a capacity of 20 million tonnes) and $2 billion for a port terminal that helps feed refinery.
- It also includes Essar Oil’s debt of $4.5 billion and about $2 billion debt with the Port Company and power plant.
What is significance of the deal?
- This acquisition is the largest ever foreign acquisition in India and also is the single largest foreign investment in the Indian refining sector
- It is Russia’s largest outbound or foreign acquisition deal. It significant milestone for Rosneft as it is entering India, one of the most promising and fast-growing world markets.
- With this, Rosneft becomes third international player after Royal Dutch and Shell and British Petroleum to enter Indian fuel retailing market.
- It also proves the attractiveness of the Indian energy market to foreign investors as India is one of the fastest growing fuel consuming economies in the world
How India and Russia will benefit?
- It will also help to strengthen the existing ties between Russia, one of world’s largest oil producer and India, one of the world’s fastest growing fuel consumer.
- Russia is keen to deepen its Soviet-era economic ties with India at a time when its own economy is stagnant and is hit by Western sanctions over the Crimean crisis.
About Essar Group
Essar Group is an Indian conglomerate led by Shashi Ruia and Ravi Ruia. It controls number of world-class assets diversified across the core sectors of Energy, Metals & Mining, Infrastructure and Services. It also occupies a strategic position in the global oil market and owns world-class refining and infrastructure assets.