They may include two power assets and the Vadinar oil terminal apart from exploration and production assets of Essar oil. Recently, Dharmendra Pradhan, Indian Minister for Petroleum and Natural Gas, said, “Rosneft of Russia, which is a major producer of oil and gas, is also keen to associate itself with Indian market." Sources say that Rosneft is likely to enter the Indian retail market through Essar’s retail business.
Debt ridden Essar is trying to monetize assets across its businesses. Meanwhile, officials say that there is a strong likelihood that the US may invoke a sanction advisory issued by the US Treasury's Office of Foreign Assets Control in 2014 to try and block the Essar- Rosneft deal. The US had included Rosneft on its sanctions list, accusing Moscow of involvement in the military conflict in Eastern Ukraine.
Lenders to Essar Oil are conscious over the deal due to potential consequences of US sanctions. When asked whether lenders have expressed concern, Manish Kedia, Senior Vice President Corporate Affairs, ESSAR group, told to Sputnik, “We would not like to comment on the matter.”
Y. K. Baweja, spokesperson of the Ministry of Petroleum & Natural Gas, said, “It is really difficult to say right now that whether we will intervene in the matter if any difficulties come along the way of the deal or not because this does not come under the jurisdiction of the petroleum ministry. The deal has to be cleared by other authorities that include the Ministry of Finance and others.”
Personnel from the Ministry of Finance did not speak on record about the deal. ESSAR wanted to sell a 74% stake to Rosneft but sensing that US sanctions might come in the way, the company reduced the share intended for sale by 25%. Essar is reportedly in talks with Dutch multinational Trafigura group to sell another 25% of assets.
India has invested 5 billion dollars in Russia’s oil and gas field. Prime Minister Narendra Modi has reiterated many times that India will expand its energy cooperation with Russia in a big way.
