Rosneft finalises $13 billion deal for Indian refiner Essar Oil

Rosneft (MCX:ROSN) is set to announce the completion of a US$12.9 billion deal to buy private Indian refiner Essar Oil, as the Russian oil giant looks to consolidate its ties with the world’s fastest growing fuel consumer.

Under the purchase, the state-owned firm will head a consortium of partners, taking a 49% stake in Essar, while European trader Trafigura and a Russian fund United Capital (UCP) will hold another 49% in equal parts.

Essar’s primary asset is a 400,000 barrel per day (bpd) oil refinery in Vadinar on India’s West coast, but also sells its fuels at 3,000 retail stations across India.

The deal represents the biggest foreign acquisition in India, and will strengthen economic ties between the two nations which date back to the Soviet era.

Rosneft’s arrival in the Indian fuel market, which was first initiated around two years ago, was preceded by the influx of fellow European energy major’s Shell and BP.