Trafigura may become a co-owner of one of the largest refineries of India — Essar Oil Ltd, the share of which also plans to buy Rosneft, Bloomberg reported, citing informed sources.
Agency sources say that Trafigura is discussing the purchase of 15% to 30% in Essar Oil. The owners of the Indian refining company, the brothers-billionaires Shashi and Ravi Rui, expect to reach an agreement with Trafigura in August, two companion tells Bloomberg. Under the deal, Trafigura might also get a share belonging to Essar Oil filling station network (which includes more than 2 thousand petrol stations), as well as the plant and share in the port of Vadinar.
Owned by the Essar Oil refinery Vadinar is the second in India the refinery in terms of refining capacity is 20 million tons per year). According to sources of Bloomberg, the brothers Rui sell shares in Esssar Oil to pay off Bank loans.
Trafigura works closely with Rosneft in 2015, it has become the second largest overseas buyer for its oil after China’s CNPC). In case of successful negotiations with Essar Oil Ltd Trafigura may become a partner in the Indian market. In July 2015, “Rosneft” signed a non-binding agreement to purchase 49% of Essar Oil Ltd and in March 2016 in the course of the working visit of the President of “Rosneft” Igor Sechin in Mumbai has been achieved “full mutual understanding” on the terms, timing and structure of the transaction. Then it was planned that it will be completed before the end of June, subject to obtaining all necessary corporate and regulatory approvals”. 21 Jun Sechin in an interview to “Russia 24” said that the completion of the transaction will take place by October. The Bloomberg sources have estimated the deal at $3 billion.
In early June of 2016 Vice-President “Rosneft” Pavel Fedorov, during a conference call with investors said that the company is looking for investment opportunities in oil refining in India, primarily to provide synergy in supply and refining. A year ago, in July 2015, Essar Oil and Rosneft, just signed a contract to supply 100 million tonnes of crude oil at the refinery Esser Oil within 10 years, they must begin this year.
But Trafigura is not the only potential partner of “Rosneft” in the Indian refinery. At stake in Essar Oil also claims to be the world’s largest oil company, Saudi state Saudi Aramco. Initially, the Saudi company was considered as an alternative buyer of Essar Oil in the event that the transaction with Rosneft will not take place, reported by Bloomberg, then the whole company was estimated at $5.5 billion Now, after concluding an agreement with the Russian state company on the conditions of purchase 49% of the brothers Rui looking for a buyer for another 25% Essar Oil Ltd, among the contenders — the same Saudi Aramco and the Swiss-Dutch trader Vitol, according to the newspaper The Economic Times.
According to the June report of the International energy Agency, India is the world leader in terms of growth of oil consumption, and will keep this leadership until 2040. This explains the interest of international investors to the local market. Already in 2016, according to the IEA, this year India will shift with the third line in the world Japan. In March the Indian Ministry of petroleum and natural gas recorded that the consumption of fuel in the country for the year grew by 11%, which was the largest increase in consumption for the year 2001. The IEA predicts that the oil consumption in India in 2016 will amount of 3.34 million barrels a day.
Representatives of Rosneft, Essar Oil, Trafigura, Vitol and Saudi Aramco had not responded to requests to RBC.