Essar Oil to sell 49% stake to Rosneft for $3.2 billion

Essar Oil is selling 49% stake to Russia’s top oil producer Rosneft for around $3.2 billion.

After this move, Rosneft will get a hold in India's second biggest oil refinery and 1,600 petrol pumps.

Reportedly, Rosneft will also supply 10 million tonnes a year of crude to Essar Oil's 20 million tonnes per annum Vadinar refinery in Gujarat for 10 years.

Essar Oil, in a statement, said that Rosneft and Essar Oil & Gas Ltd / Essar Energy Holdings Ltd, companies incorporated and managed under the laws of Mauritius, have signed a non-binding Term Sheet with regard to Rosneft's participation in the equity capital of Essar Oil Ltd with a share of up to 49%.

However, news agency PTI reported that the deal does not include Essar Oil's upstream portfolio comprising of five CBM blocks, holding up to 10 trillion cubic feet of gas resource as well as Ratna and R-Series oil and gas fields in the western offshore.

Promoter Ruia family hold 90.5% of Essar Oil. Out of this, 65.6% is in the form of overseas depository shares.

As per reports, Essar may cut imports from Iran to accommodate Russian barrels.

Rosneft is majority owned by the Russian government with BP Plc holding under a 20% stake and public shareholding at around 10%.

Meanwhile, Rosneft in a statement said the crude supply agreement enables it to expand market outlet and amplifies the volume of supplies to the region, where growing points of the world's economy are concentrated.

The deal, Rosneft said, also includes marketing business whereby Essar operate a retail chain of 1,600 stations located in India.