State-run ONGC Videsh is in talks with Russia’s Rosneft to pick up equity stakes in two blocks in East Siberia in two separate deals. The exact sizes of the deals are not known but are believed to have combined worth of around $2 billion.

An announcement is likely when Russian President Vladimir Putin visits India in December, according to a source privy to the matter.

In one of the deals, OVL, the overseas subsidiary of India’s largest explorer ONGC, is looking at picking up a 10% stake in the Vankor fields that are producing crude oil, the source said, adding that feasibility studies are currently on. The field, which has been under production since August 2009, currently produces more than 400,000 barrels of oil per day, double the output of Barmer, India’s largest onshore field, which is operated by Cairn India. The second deal OVL is discussing with Rosneft is to buy equity in a greenfield project, Yurubcheno-Takhomskoye. “This is a discovered asset and OVL is evaluating picking up 49% stake,” said the source.

The proposed two deals will bolster the asset base of OVL, whose overseas forays are a key part of India’s energy security strategy. The company, with cumulative investments abroad up to March 31, 2014, of over $22 billion, has stakes in 33 oil and gas projects in 16 countries. It produced 8.36 million tonnes of oil and oil equivalent gas in 2013-14 as against 0.252 million tonnes annually a decade ago.

The area of the Vankor field is nearly 416.5 square kilometres. According to Rosneft, the initial recoverable reserves in the Vankor field are 500 million tonnes of oil and condensate, and 182 billion cubic metres of gas as of January 2014.

Oil and gas condensate production in 2013 was 21.4 million tonnes, which is 17% more than in the previous year. Currently, daily production rate is 9% more than at the same period in 2013, according to the Rosneft website.

In July, Russian exploration giant Rosneft came under the umbrella of US sanctions imposed on the country for its actions in Ukraine. The energy firm has sought financial support to the tune of $40 billion to offset sanction-hit measures.

According to industry watcher, Rosneft is trying to sell stakes in its prolific assets to mop up funds.

Interestingly, Putin has also invited China to invest in the Vankor oil fields.

Recently, Putin was quoted as saying, “Overall, we take a cautious approach to letting in our foreign partners, but we of course, set no restrictions for our Chinese friends.”

A recent report said China has long sought access to Russia’s upstream sector in return for capital investments in Russian export pipelines, but Moscow has been reluctant to grant foreign companies equity stakes in conventional onshore oil and gas deposits.

The Yurubcheno-Takhomskoye project has the potential to produce 1 billion barrels per annum after three years. In the past less than two years, OVL has made new acquisitions to the tune of $4 billion including 2.72% in the Azeri, Chirag and the deepwater portion of Guneshli fields in the Azerbaijan; 2.36% interest in the Baku-Tbilisi-Ceyhan pipeline; additional 12% in Block BC-10 at Campos Basin in Brazil; 6% stake in the Rovuma Area 1 offshore block in Mozambique from Videocon; and a direct 10% stake in the same Rovuma Area 1 from Anadarko.