Essar Oil sale closes

A consortium led by Rosneft completed the acquisition of India’s second-largest private refiner, Essar Oil, the Russian oil giant announced on Monday.

The transaction, valued at USD 12.9 billion, includes the 20-million-tpy Vadinar refinery, one of India’s most advanced, as well as a network of more than 3,500 fuel stations in India. Rosneft acquired 49.13% of Essar Oil while partners Trafigura and UCP Investment Group bought another 49.13%.

“This day marks the beginning of a new chapter for [Essar Oil],” Rosneft CEO Igor Sechin said in a statement. “The closing of the deal is a remarkable achievement for Rosneft too: The company has entered the high-potential and fast-growing Asia Pacific market. The acquisition of the stake in the Vadinar refinery creates unique opportunities of synergies with existing Rosneft-owned assets and will help improve efficiency of supply to other countries within the region.”

The closing of the deal comes at a time when Rosneft is rapidly expanding its international presence. Despite Western sanctions, the world’s largest listed oil company by output has extended a USD 6-billion loan to Venezuela, signed broad co-operation agreements with China’s CEFC and deepened its involvement in the Kurdistan Region of Iraq in recent weeks. In June, Rosneft announced an oil find in the Arctic as well as plans to invest USD 4.41 billion in the remote region in the next five years, while last week it tapped Germany’s former Chancellor Gerhard Schröder for its board, heating up speculations about its growing international clout.

In a separate announcement Monday, Trafigura said Essar’s new leadership had been selected. Tony Fountain was appointed to chair the new board of the company, while B. Anand was appointed CEO.

“Strengthening Essar Oil Limited’s balance sheet will be the first priority, a process we have already started by closing this transaction,” Fountain stated in the press release.