Monday 23 July 2018

Rosneft and Total in $20bn swoop for Essar and Maersk assets

The shadow of a worker is seen next to a logo of Russia's Rosneft oil company at the central processing facility of the Rosneft-owned Priobskoye oil field outside the West Siberian city of Nefteyugansk, Russia
The shadow of a worker is seen next to a logo of Russia's Rosneft oil company at the central processing facility of the Rosneft-owned Priobskoye oil field outside the West Siberian city of Nefteyugansk, Russia

Saket Sundria and  Christian Wienberg

Russian oil giant Rosneft PJSC and partners including Trafigura Group have finalised their $12.9bn (€11bn) purchase of India's Essar Oil.

It comes as shipping giant AP Moller-Maersk agreed to sell its oil and gas operations to Total of France for $7.45bn, in a combined equity and debt deal.

The Essar deal took more than 10 months to complete after it was announced last October and more than two years after Rosneft first confirmed it was in talks to buy India's second-largest private oil refiner. The purchase gives Russia's biggest oil producer and one of the world's largest commodity traders access to a global demand centre in Asia, while helping Essar Group reduce its debt by about $11bn and shift focus to its struggling steel business.

Essar Group sold 49pc of Essar Oil each to Rosneft and a consortium of Trafigura and United Capital Partners, the Indian conglomerate said in a statement.

The closing of the acquisition enables Rosneft to enter one of the world's fastest-growing markets, the Russian company said in a separate statement.

Essar will sell its refinery at Vadinar on India's west coast and its fuel-retailing business along with a port terminal and power plant that helps feed the refinery. The deal for the 400,000-barrel-a-day refinery will give Russia's biggest oil producer an outlet in South Asia for its production as oil-rich countries vie for market share.

Meanwhile, Maersk's energy unit has been earmarked for sale since the middle of last year, as the owner of the world's largest container freight company focuses on its transport operations. The sales price is slightly above what some analysts had expected. (Bloomberg)

Irish Independent

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