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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.

Oct 17, 2016 17:50 IST
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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.

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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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