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Business

Rosneft's strategic India deal in the bag

Russia's state-controlled oil giant Rosneft has reported the closing of a strategically important deal with India's Essar Oil. The investment gives it access to the high-potential and fast-growing Asia Pacific market.

Rosneft announced Monday it had finalized its deal with Essar Oil under which the Russians acquired 49 percent of the Indian company that's valued at $12.9 billion (11 billion euros).

Another 49 percent are being acquired by a consortium including global commodities giant Trafigura.

Essar Oil owns one of the world's most modern refineries, Vadinar, and controls over 3,500 filling stations.

In a statement Monday, Essar called the deal "Russia's single-largest foreign investment made anywhere in the world and also the single-largest investment in India."

New markets, new revenue

One of the brothers, who founded the Indian company, Shashi Ruia, said "today is a historic day for Indo-Russian economic ties, reflecting the shared vision of two of the world's most dynamic leaders."

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India under Prime Minister Narendra Modi is one of the emerging countries with which Russian President Vladimir Putin has built up dialog in recent years.

"The closing of the deal is a remarkable achievement for Rosneft too as the company has entered the high-potential and fast growing Asia Pacific market, said Rosneft CEO Igor Sechin.

The transaction is indeed seen as a strategic triumph for Russia, allowing it to move into other markets amid EU and US sanctions imposed against it over the country's Ukraine policy.

Additionally, Rosneft said Essar's Vadinar refinery would allow it to process crude oil produced in Venezuela, which is especially difficult to refine.

hg/tr (AFP, dpa)

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