OIL completes buying oil block in Russia

Oil India Ltd, the nation’s second largest explorer, on Friday said it has completed acquisition of 50 per cent stake in an oil block in Russia for $85 million. OIL bought the stake from Ireland-registered, Russia- focused firm PetroNeft Resources plc in License 61 in Tomsk Oblast in Russia.

The deal includes a three-stage payout including $35 million in cash up-front, $45 million in exploration and development spending and a performance bonus of up to $5 million. “The total commitment from OIL will be $85 million including $45 million for development capex. The effective date of the acquisition is January 1, 2014,” the company said in a statement here.

The acquisition marks OIL’s entry into Russia and is a significant addition to the company's overseas E&P portfolio. Last month, it had signed an MoU with Russia’s Gazprom International BV for joint pursuit of exploration opportunities across the globe as well as collaborate on liquefied natural gas (LNG).