New Delhi, December 18

Indian Oil Corp and Oil India are in talks with Russia’s Rosneft to buy up to a 29 per cent stake in a Siberian oil project, two sources said, as New Delhi accelerates a push to secure overseas energy assets.

India, the world’s fourth-biggest oil consumer, has to ship in three quarters of its oil needs and with oil prices close to their lowest since the global financial crisis has added incentive to seal purchases to limit import reliance.

The deal, which could be worth around $1 billion based on the valuation of a recent stake purchase, is expected to take final shape during Prime Minister Narendra Modi’s visit to Moscow next week for summit talks with President Vladimir Putin, said the sources with direct knowledge of the situation.

Rosneft, the world’s biggest listed oil company by output, also stands to benefit as it has been scouting for partners as western sanctions tied to Russia’s annexation of Crimea have limited its access to global funds and technology.

Officials at the two state-run Indian firms are in Moscow to negotiate with Rosneft for up to a 29 per cent stake in Rosneft’s Taas-Yuriakh, the sources said, adding that the exact size and value of the stake was yet to be decided.

The sources declined to be named because of the sensitivity of the issue.

Taas-Yuriakh, which operates the Srednebotuobinsk field, is expected to produce more than five million tonnes of oil annually from 2017.

Rosneft last month sold a 20 per cent share in Taas-Yuriakh to BP for $750 million, and based on that valuation a 29 per cent stake could be worth around $1 billion.

Rosneft said on November 30 it planned to select a second partner in Taas-Yuriakh.

Business development directors at the two Indian companies and Rosneft declined to comment.

If the deal goes through, it would mark India’s second acquisition in Russia since Modi took office in May last year

and a third under the ruling Bhartiya Janata Party.

In 2002, Oil and Natural Gas Corp (ONGC) bought a 20 per cent stake in the Sakhalin I field.

India has frequently lost out to China in the race to acquire resources overseas in the last decade, but its oil diplomacy has gained momentum under Modi, who has made frequent foreign trips.

In September, ONGC Videsh, the overseas investment arm of oil firm ONGC, acquired a 15 per cent stake in Russia’s Vankor field, a deal that was sealed in July when Modi met Putin at a BRICS summit.

NK Verma, managing director of ONGC Videsh, said the push by the Modi government meant that ‘India Inc has now been taken as a dependable partner and a serious player by the global community in the bigger projects’.