Russia's Rosneft Oil Company acquires India’s Essar Oil for 13 billion US dollars
Rosneft Oil Company's partners include Rosneft Oil Company, Netherlands-based commodities trader Trafigura and private investment group United Capital Partners.
Russia's Rosneft Oil Company and its partners on 15 October 2016 acquired India’s second biggest private oil firm Essar Oil in an all-cash deal valued at about 13 billion US dollars.
Rosneft Oil Company's partners include Rosneft Oil Company, Netherlands-based commodities trader Trafigura and private investment group United Capital Partners. The acquisition was announced during the 8th BRICS Summit in Goa.
Highlights of the acquisition
• Rosneft will have a 49 percent stake in Essar Oil’s refinery, port and petrol pumps.
• Trafigura Group Pte and United Capital Partners will split 49 percent equity equally.
• The remaining 2 percent is held by minority shareholders after delisting of Essar Oil.
• The deal includes 10.9 billion US dollars for Essar Oil’s Vadinar refinery of Essar Group and 2 billion US dollars for a port terminal that helps feed refinery.
• It also includes Essar Oil’s debt of 4.5 billion US dollars and about 2 billion US dollars debt with the Port Company and power plant.
This acquisition deal is a milestone for Rosneft as it is entering India, one of the most promising and fast-growing world markets. With this, Rosneft became the third international player after Royal Dutch and Shell and British Petroleum to enter Indian fuel retailing market.
About Essar Oil Limited
• Essar Oil, subsidiary of Essar Group, is a fully integrated oil & gas company and is among India’s largest single site refineries in Vadinar, Gujarat which has a capacity of 20 million tonnes.
• Essar Oil has a portfolio of onshore and offshore oil & gas blocks with about 1.7 billion barrels of oil equivalent in reserves & resources.
• The company was established in 1969.
• Essar Group is led by Shashi Ruia and Ravi Ruia.
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