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Oil India Ltd, the nation’s second-biggest state-run explorer, has bought a 50 per cent stake in an oil block in Russia for $85 million.
OIL last month signed an agreement with Ireland-registered but Russia-focused firm PetroNeft Resources plc to take a 50 per cent non-operating interest in License 61 in Tomsk Oblast in Russia, official sources said.
The deal includes a three-stage payout including $35 million in cash up-front, $45 million in exploration and development spending and a performance bonus of up to $5 million.
Tungolsky Licence 61 is located on the east side of the Ob River in the least explored oil bearing region of the Tomsk Oblast. The 4,991 square kilometer Licence contains 7 oil fields and over 25 identified prospects and leads.
According to independent expert Ryder Scott the block holds 117.68 million barrels of oil reserves. These reserve estimate do not include the new oil find of Sibkrayevskoye.
The block started production in 2010 and achieved a peak of 3,000 barrel of oil per day in 2011.
Sources said the transaction is subject to PetroNeft shareholder nod and regulatory approval. PetroNeft has called an Extraordinary General Meeting of shareholders on May 9 for a vote on the deal.
On completion of the deal, OIL will be able to book 50 per cent of production and reserves from Licence 61.
The income from the farm-out will settle up Petroneft debts and the company is targeting resumption of drilling up to six wells starting in June.
The income from the farm-out will settle up Petroneft debts and the company is targeting resumption of drilling up to six wells starting in June.
Source: Agencies
