With oil explorer ONGC’s acquisition of HPCL now well on track to be completed by this fiscal, the latter’s plans to pick up stakes in upstream fields in Russia will be shelved.
Earlier, an HPCL official had told BusinessLine the company was keen to pick up stakes in Russian oilfields — along with ONGC (through ONGC Videsh Ltd), Oil India, Indian Oil Corporation and Bharat PetroResources (part of BPCL) — in several instalments starting from 2015. The four companies now own 49.9 per cent of Vankorneft, a subsidiary of Russian state-owned oil company Rosneft that owns and operates the Vankor cluster.
The Vankor cluster comprises three small fields — Suzunskoye, Tagulskoye and Lodochnoye — around Vankor in eastern Siberia. It is Rosneft’s second largest field in terms of production and, according to reports, it accounts for about 4 per cent of the country’s annual oil production, pumping out 421,000 barrels of crude a day.
An HPCL official had earlier said the company was looking at picking up stakes in satellite fields in the region and was evaluating opportunities. However, the plan has now changed, with the company being merged with ONGC.
Sumit Pokharna, Deputy Vice-President, Kotak Securities, said: “The merger means ONGC will now focus on the upstream. HPCL’s plans to pick up stakes in oilfields — like other PSU oil marketers — may now be cancelled out.”