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India: Oil and Gas Business Essar Signs Multi-Billion-Dollar Transaction with Rosneft

Editor: Alexander Stark

Essar Energy and Oil Bidco sold Essar Oil Limited to a consortium of Rosneft and Trafigura-UCP for $ 12.9 billion. The transaction represents Russia's largest ever foreign investment, as well as India's largest foreign direct investment.

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The acquisition of Essar represents Russia's largest ever foreign investment, as well as India's largest FDI.
The acquisition of Essar represents Russia's largest ever foreign investment, as well as India's largest FDI.
(Source: Essar)

Mauritius — The transaction includes the sale of Essar Oil's refinery at Vadinar and retail assets with a value of $ 10.9 billion together with Vadinar Port and related infrastructure assets worth $ 2.0 billion. Vadinar Port has a capacity of 58 million tonnes with world-class dispatch and storage facilities.

The Vadinar power plant, which is included in the transaction, has a 1,010 MW state-of-the art, multi-fuel unit that supplies both power and steam to the Vadinar refinery. The company's 20 mtpa Vadinar Refinery is one of the world’s largest, with a complexity index of 11.8.

The infrastructure sold to Rosneft includes a pan-India network of over 3,500 retail outlets (representing India’s largest private sector retail network), as well as the associated refinery infrastructure.

Rosneft (through its subsidiary, Petrol Complex) has acquired 49.13 % stake, and Trafigura-UCP consortium (through Kesani Enterprises) has acquired an equal stake. The remaining 1.74 % stake continues to be held by retail shareholders.

The transaction was initiated in August during a meeting of India's Prime Minister Modi with Vladimir Putin, President of the Russian Federation. This investment represents Russia’s single largest foreign investment in the world. The transaction is also the single largest foreign investment in India.

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