Russia’s top oil producer Rosneft buys stake in Indian oil giant

Russia’s top oil producer Rosneft, commodities trader Trafigura and United Capital Partners (UCP) investment firm have closed a deal to buy India’s second-largest private refiner Essar Oil Limited (EOL), Rosneft and EOL said Monday.

A combined 98.26 percent stake in EOL has been acquired for 12.9 billion U.S. dollars, an EOL statement said.

Rosneft has bought a 49.13 percent stake, and the Trafigura-UCP consortium has acquired an equal stake. The remaining 1.74 percent stake will continue to be held by retail shareholders, it said.

The transaction included the sale of EOL’s Vadinar oil refinery and retail assets for 10.9 billion dollars together with Vadinar port and related infrastructure assets for 2 billion dollars.

“The acquisition of the stake in the Vadinar refinery creates unique opportunities of synergies with existing Rosneft-owned assets and will help improve efficiency of supply to other countries within the region,” Rosneft CEO Igor Sechin said in a separate statement.

The agreement on the EOL purchase, representing Russia’s largest ever foreign investment and single largest tranche of foreign direct investment in India, was reached in October 2016.

The Vadinar refinery, one of the world’s largest, has a capacity to process 20 million tons of oil a year and owns a pan-India network of more than 3,500 retail outlets.

The Vadinar port has a capacity of 58 million tons with world-class dispatch and storage facilities.

%d bloggers like this: