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Rosneft turns to growing India downstream market with Essar refining pact

11th December 2014

Rosneft and Essar have signed key terms of oil and oil products supplies to Essar refineries in India

Rosneft and Essar have signed key terms of oil and oil products supplies to Essar refineries in India
The reached agreement opens new horizons of cooperation between the two countries, thanks to the synergistic potential of the partnership in upstream and downstream areas of two leaders of the oil and gas industry of Russia and India

Rosneft is to expand its distribution area and build up deliveries to the region, where the world’s economy growth zones are concentrated.

Supplies may begin in 2015.

The document was signed on December 11 in New Delhi by the head of Rosneft, Igor Sechin, and the founder of Essar, Shashi Ruia, in the presence of the president of the Russian Federation Vladimir Putin and the prime minister of India Narendra Modi.

“The strategic potential of reached agreement between Rosneft – a global leader of hydrocarbon production – and Essar – a world’s leading player in the refining area – can hardly be overestimated,” said Sechin.

The reached agreement opens new horizons of cooperation between the two countries, thanks to the synergistic potential of the partnership in upstream and downstream areas of two leaders of the oil and gas industry of Russia and India.

“The performance of the terms of the agreement will have a substantial impact on the scale of economical cooperation between Russia and India and will fuel significant growth in the goods turnover between two countries,” added Sechin.

“For our Indian partners the signing of this agreement represents a vital element of basic supplies diversification which, at the same time, will ensure energy security for the country. The Russian counterpart, in turn, will get the possibility of production and supplies volume planning to a new region with considerable growth potential”.

Thanks to this agreement Rosneft grants itself a secure market outlet of oil and oil products, while Essar gains a reliable and stable partner as a supplier of oil and oil products to its refining facilities.

“We are very happy to partner Rosneft, a global leader in hydrocarbon reserves and production, for long term supply of crude oil and products,” said Ruia. “This provides good long term raw material security to our refineries.”

Essar Global Fund Limited (Essar) is an investment fund managed by its investment manager, Essar Capital Limited. The fund is a global investor, controlling a number of world-class assets diversified across the core sectors of energy, metals and mining, infrastructure (comprising ports and EPC businesses) and services (primarily comprising shipping and BPO businesses).

The aggregated revenues of the fund’s portfolio companies total USD 35bn. The fund’s portfolio companies employ over 60,000 people across 29 countries, and have adopted international standards of health, safety, environmental protection and corporate governance.

Essar Oil Limited, one of the assets in the energy portfolio of Essar, is a fully integrated oil and gas company of international scale with strong presence across the hydrocarbon value chain from exploration and production to refining and oil retail.

Essar Oil owns India’s second largest single site refinery having a capacity of 20 MMTPA and complexity of 11.8, which is amongst the highest globally.

It has a portfolio of onshore and offshore oil and gas blocks with about 1.7 billion barrels of oil equivalent in reserves and resources. There are more than 1,700 Essar-branded oil retail outlets in various parts of India.

 

Read Oil & Gas Technology’s interview with Manish Maheshwari, CEO of E&P at Essar Oil, explaining India's plans to meet its growing energy demand with domestic supply

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