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Russia's Rosneft Oil Company set to buy India's Essar

Russia s Rosneft Oil Company set to buy India s Essar pardesi news 1476969679

This acquisition is the largest ever foreign acquisition in India and the single largest foreign investment in the Indian refining sector, till date.

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 $13 billion. 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. With this takeover, the Russian company will be the third international player after Royal Dutch Shell and BP to enter the Indian fuel retailing market.

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.

The deal will 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 consumers. 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.

Rosneft may supply Venezuelan oil to Essar’s Vandinar refinery after a deal to buy a stake in the Indian company is finalized.

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 has onshore and offshore oil & gas blocks, with about 35,000 km2 available for exploration. Total reserves and resources across these blocks is 2,109 mmboe. The refineries are Vadinar in Gujarat India; Stanlow in Cheshire, United Kingdom, and 50% controlling stake in Kenya Petroleum Refineries. It has retail and direct sales in Kenya. The company does marketing of all products to SAARC countries.

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Patrick Callahan

Pardesi News Reporter

Pardesi News Reporter

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