Rosneft Completes $12.9bn Purchase of Indian Essar Oil

Russian Rosneft led consortium has closed to the deal to acquire 98% of Essar Oil from Essar Energy Holdings and its affiliates for close to $13bn.

The deal was first announced in October last year. Of the $12.9bn, $10.9bn are for Essar Oil’s refining and retail assets, and $2bn for Vadinar port and related infrastructure.

The first sale and purchase agreement envisaged the sale of 49% to Petrol Complex, a subsidiary of Rosneft; the second envisaged the sale of the remaining 49% to Kesani Enterprises Company, which is owned by a consortium led by trader Trafigura at an enterprise valuation of $10.9bn. The remaining 2% will remain with promoters of Essar.

“Rosneft has acquired a stake in a first class asset with a significant development potential,” Rosneft said August 21. The Vadinar refinery, located in the Indian state of Gujarat, possesses high feedstock flexibility, with heavy grades from Latin America accounting for more than half of all feedstock processed. Vadinar refinery's throughput capacity is 20mn mt/yr, making it the second biggest in India. Essar’s business also includes a vast network of 2,700 branded retail outlets across India.

Shardul Sharma