Cabinet allows ONGC Videsh to buy 11% stake in Russia's JSC Vankorneft

New Delhi: The Union cabinet on Wednesday allowed ONGC Videsh Ltd (OVL) to acquire 11% stake in Russian oil company JSC Vankorneft from Rosneft Oil Co. (Rosneft) for $930 million.

This will provide 3.2 million metric tonnes of oil equivalent (MMTOE) to OVL by 2017, Frank Noronha, the principal spokesperson of the Union government, said after the cabinet meeting. This is “in line with ONGC’s goal of adding high quality international exploration and production assets”, he tweeted, adding that this will help in securing energy security for the country.

“It will also provide an opportunity to Indian public sector Oil and Gas companies to acquire new technologies from Rosneft. The acquisition is in line the ONGC’s stated objective of adding high quality international assets to India’s Exploration and Production (E&P) portfolio and thereby augmenting India’s energy security,” a cabinet committee on economic affairs statement said.

Recently, an Indian consortium comprising Oil India Ltd (OIL), Indian Oil Corp. Ltd (IOCL) and Bharat PetroResources Ltd (BPRL) acquired 23.9% stake in Vankorneft at a cost of $2020.35 million, the cabinet said. Earlier in May 2016, OVL completed the formalities on acquisition of 15% stake in Vankorneft at a cost of $1.284 billion which gave OVL 4.11 MMTOE.

The Union cabinet also approved setting up of a medical devices manufacturing park in Tamil Nadu. The Union health ministry-controlled HLL Lifecare Ltd will have more than 50% stake in the park at Chengalpattu in Tamil Nadu, and will house medical equipment, biotechnology firms in a park spread over 330 acres of land.

The government said the decision will “boost local manufacturing of hi-end products at significantly lower cost” and contribute in the “development of medical devices and technology sector”.

The Medipark project will be the first manufacturing cluster in the medical technology sector in the country, and “would contribute to the development of medical devices and technology sector and allied disciplines in the country, which is still at a nascent stage besides generating employment and give a boost to the government’s Make in India Campaign,” the cabinet said.

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