Rosneft Looks To Complete Essar Oil Deal In 'Next Few Weeks'

New Delhi: Russian oil giant Rosneft on Wednesday said it will close deal to buy India's second-biggest private oil firm Essar Oil in next few weeks to gain a foothold in the world's fastest growing energy market.

"What Rosneft is doing (is) we signed several purchase agreements (and) we are hoping in the next few weeks to close purchasing the Vadinar oil refinery which as you know is one of the top ten refineries in the world," said Andrew James Balgarnie, adviser to CEO of Rosneft, at the Petrotech conference here.

Rosneft and its partners had in October signed an all-cash deal to acquire Essar Oil at an enterprise value of about $13 billion.

While the Russian firm Rosneft bought a 49 per cent stake in Essar Oil's refinery, port and petrol pumps, Netherlands-based Trafigura Group Pte, one of the biggest commodity trading companies in the world, and Russian investment fund United Capital Partners split another 49 per cent equity equally.

The remaining 2 per cent will be held by minority shareholders after delisting of Essar Oil.

The deal has an enterprise value of close to $12.9 billion - $10.9 billion being for a 20 million tonnes a year refinery in Gujarat and over 2,700 petrol pumps and another $2 billion for Vadinar port in Gujarat.

The deal factors in Essar Oil's debt is of about $4.5 billion and about $2 billion debt with the port company.

Also, the nearly $3 billion dues to Iran for past oil purchases will continue to be on Essar Oil books.

The 49 per cent stake Trafigura and UCP are picking will be split between the two in 49:49 ratio while the Essar Group will hold the remaining 2 per cent.

Balgarnie said Rosneft's relationship with India has two aspects.

"Recently, Indian oil companies like Indian Oil Corp, Oil India Ltd and ONGC had acquired stakes in our Vankor and Tass-Yuryakh oilfields. Now, we are also closing in on the acquisition of Vadinar refinery," he added.

The acquisition is the biggest in India and largest outbound deal for Russia. The all cash deal was expected to close in first quarter of 2017.

Rosneft is on the list of companies sanctioned by the US for Russia's annexation of Crimea in 2014. Essar Oil would have come on that list if Rosneft would have picked up 51 per cent stake.

He added that though no new deals are in the offing, his company always would be interested in partnering Indian companies.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)