Rosneft will control 49 per cent of Essar Oil
WASHINGTON, Oct 20 (Reuters) – A deal by a state-owned Russian oil company Rosneft and others to buy India’s Essar Oil for $12.9 billion does not run afoul of U.S. sanctions on Russia, the State Department said.
“I don’t think we see any violation of any U.S.-EU sanctions stemming from this deal,” Mark Toner, a spokesman for the State Department told reporters in a daily briefing on Tuesday.
The United States has imposed sanctions on Russia as a penalty for its aggression in Ukraine, including the annexation of Crimea.
Under the deal, Rosneft is teaming with a consortium of United Capital Partners (UCP), a Russian private investment group, and global oil trader Trafigura to buy Essar Oil. The oil company assets include a massive 400,000 barrels per day refinery, a port and fuel stations.
The deal was carefully put together to reduce the risk of sanctions. Rosneft will control only 49 per cent of Essar with Trafigura and UCP jointly holding another 49 per cent. But UCP has said it may sell its stake of the deal in five years, which has raised questions about whether Igor Sechin, a close ally of Russian President Vladimir Putin, would have control over the acquisition.
The deal is expected to be completed in a few months.
(Reporting by Timothy Gardner; Editing by Bill Trott)