New Delhi (Sputnik) — Roadblocks have been cleared for one of the biggest investments of any Russian firm in India — the Rosneft-Essar oil deal.
Sources indicate that Russian companies and Essar Oil are expected to announce the acquisition after the India-Russia Annual Summit in Goa. According to the agreement, Rosneft will acquire 49 percent stake in Essar Oil, while, Dutch commodities trading partner Trafigura and Russian fund United Capital Partner will share another 49 percent equally between them.
Narendra Taneja, an Indian energy expert, says, “This would be a big foreign investment in India and definitely would bring Russia and India closer economically.”
The deal is estimated to be worth $12 billion.
However, sensing the US sanction might come in the way of deal, Essar had reduced the share intended for sale by 25%. It is not clear whether the Indian government had intervened in the matter to push the deal as early as possible. The expert does not mention diplomatic intervention, but Taneja is confident that ‘the deal should cross the sanctions hurdles successfully.’
“With this deal, Rosneft would secure demand for its crude oil. The deal would open up India's petrol, diesel, air turbine fuel and other petroleum products market for Roseneft. This means a lot for the Russian company since India is the fastest growing oil market in the world," Taneja said.
Rosneft is expected to enter the Indian retail market with 2,000 retail outlets currently owned by Essar.