Government clears ONG's extra 11% stake buy in Russia's Vankor fields

New Delhi: The cabinet has approved ONGC Videsh`s purchase of an additional 11 percent stake in Russia`s Vankor oil fields from Rosneft for $930 million, raising the Indian firm`s stake in the project to 26 percent, a government statement said.

The latest move brings the investment by Indian companies in Russia`s east Siberian fields to $5.5 billion, aiding the country`s sanctions-hit economy.

"This would go a long way to create a new energy bridge between the two strategic partners," Oil Minister Dharmendra Pradhan tweeted on Wednesday.

Russia is keen to develop and deepen economic ties with India and sell oil to one of the world`s fastest-growing economies at a time when revenues have been hit by a plunge in global oil prices.

Indian Prime Minister Narendra Modi, who wants to cut the country`s oil imports by 10 percent in six years, is steering efforts to buy foreign energy assets, taking advantage of low global oil prices and a slowdown in China`s overseas purchases.

In May, ONGC Videsh, the overseas investment arm of explorer Oil and Natural Gas Corp , paid $1.284 billion for a 15 percent stake in Vankorneft, which owns the Vankor fields.

With the latest move, Indian companies together own 49.9 percent of Vankorneft.

Last week, India approved a $3.26 billion investment by a consortium of Oil India Ltd , Indian Oil Corp and Bharat Petro Resources Ltd for a 23.9 percent stake in Vankorneft and a 29.9 percent share in Russia`s Taas Yuriakh fields.