Rosneft buy 49 pc stake in Essar’s Vadinar refinery in India

Rosneft to buy 49 pc stake in Essar’s Vadinar refinery in India

1:08 PM, 9th July 2015
Rosneft to buy 49 pc stake in Essar’s Vadinar refinery in India
The document was signed in Ufa within the BRICS summit in continuation of the agreements, reached in 2014 during the visit of Russian president Vladimir Putin to India. Also the Indian prime minister Narendra Modi and Putin were present at the event.

MOSCOW, RUSSIA: Rosneft chairman of the management board Igor Sechin and Essar Group founder Shashi Ruia signed a long-term contract for oil supplies for refining at the Vadinar refinery (India). The contract envisages total supplies of 100 million tonne of crude oil over a period of 10 years.

Rosneft and Essar also signed a term sheet with regard to Rosneft’s participation in the Vadinar refinery equity capital with a share of up to 49 percent.

Rosneft participation in the refinery’s equity capital will allow Rosneft to obtain a share in one of the biggest refineries in India and the Asia-Pacific region. The refining capacity of the Vadinar refinery is 20 million tonne per annum. The deal also includes marketing business whereby Essar operate a retail chain of 1600 stations located in India. From this base the parties intent to further develop both refining and marketing businesses in India.

The implementation of the proposed transaction will increase the earning capacity of Rosneft operations in the region along the whole value chain and open new perspectives for the development of commercial activities in Asia-Pacific, will promote the expansion of the trading business’ potential.

The document was signed in Ufa within the BRICS summit in continuation of the agreements, reached in 2014 during the visit of Russian president Vladimir Putin to India. Also the Indian prime minister Narendra Modi and Putin were present at the event.

Rosneft expands market outlet and amplifies the volume of supplies to the region, where growing points of the world’s economy are concentrated. Thanks to this agreement Rosneft grants itself a secure market outlet of crude oil, which will create an additional possibility of production planning and marketing.

“The reached agreement is of a strategic nature. The performance of the terms of the signed documents will have a substantial impact on the scale of economical cooperation between Russia and India. The goods turnover between two countries will grow more than 50 percent. The new formula of integrated cooperation opens wide perspectives for the development of dialogue, both in specialized and related areas,” said Sechin.

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