ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), is in talks to acquire stake in two Siberian oilfields, Oil Minister Dharmendra Pradhan said today.
OVL “is in discussions with a Russian oil company for acquiring participating interest in two Siberian oil fields,” he said in a written reply to a question in Rajya Sabha here.
While the Minister did not name the fields, sources said OVL was in talks for a stake in Vankor and Yurubcheno-Tokhomskoye fields.
“Discussions are at a preliminary stage,” Pradhan said.
Sources said an agreement for the stake was to be signed during the visit of Russian President Vladmir Putin in December last year but differences between the two sides prevented formal signing of the pact.
Russia’s biggest oil company Rosneft had offered to sell 10 per cent stake in the strategic Vankor oilfield in Siberia to OVL.
In September, 2014, Rosneft had sold 10 per cent stake in the Vankor cluster fields in northern Siberia to China’s CNPC for about USD 1 billion.
Vankor is the largest field to have been discovered and brought into production in Russia in the last 25 years. As of January 1, 2014, the initial recoverable reserves in the Vankor field are estimated at 500 million tonnes of oil and condensate, and 182 billion cubic meters of gas.
Vankor will reach peak output of 500,000 barrels per day (bpd) or 25 million tonnes a year in 2019. The field, which has driven recent Russian output growth, pumped 435,000 bpd in September, 2014.
Russia is the world’s top oil producer with current output of 10.5 million bpd but its key producing region – West Siberia – is maturing.
Besides Vankor, Rosneft has also made a proposal to OVL for joint development of Yurubcheno-Tokhomskoye oilfield in eastern Siberia.
The field is estimated to hold 991 million barrels of oil equivalent reserves and is planned to start production in 2017. Yurubcheno-Tokhomskoye will reach a production plateau of up to 5 million tonnes a year (100,000 bpd) in 2019.
OVL is interested in expanding its presence in Russia as it looks to source one million barrels per day of oil and oil-equivalent gas from Russia.
It already has 20 per cent stake in Sakhalin-1 oil and gas field in Far East Russia and in 2009 acquired Imperial Energy, which has fields in Siberia, for USD 2.1 billion.