ONGC is interested in acquiring a 49% stake in Russia’s Tagul oilfield. The deal is likely to be formalized by the fourth quarter of this year. ONGC Videsh Ltd. (OVL), the overseas arm of Indian state-owned petroleum company, Oil and Natural Gas Corporation (ONGC) is exploring the opportunity to acquire a 49% stake in Russian oil producer Rosneft Oil Co.’s Tagul field.
According to sources, the deal is likely to be around 1 billion dollars, though nothing has been officially announced. Since the Tagul field is not yet operational, OVL will have to share the cost of making the field ready for production. Western sanctions targeting Russian oil companies prohibit the West’s largest oil companies from partnering with Russia in deep-sea and shale prospecting projects, as well as upstream transit towards India and China. Western companies are also not allowed to export to Russia high tech equipment used in oil exploration and production. Therefore, Russia has adopted a new “Asia Pivot” strategy, the most marked aspect of which is its turn towards India and China.