Banks including Citi, DBS, Mizuho, Standard Chartered and Sumitomo Mitsui Banking Corp have given a nine-month loan to OVL, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), at an interest rate of Libor plus 83 basis points, sources privy to the development said.

At one-month average Libor rate, the interest rate comes to about 1.3 per cent, they said.

OVL had in September last year struck a deal to buy 15 per cent in the Russia’s second biggest oil field of Vankor from Rosneft for USD 1.268 billion.

Sources said the loan is likely to be drawn by the month end. It will be during the course of nine months replaced by a long-term financing.

OVL had in September last year signed an agreement to buy 15 per cent stake in Vankorneft, the developer of the Vankor oil and gas condensate field in Turukhansky district of Krasnoyak Territory in Russia.

In March, OVL signed an initial agreement to raise its stake in Vankor to 26 per cent from 15 per cent, while three other state companies — Indian Oil Corp (IOC), Oil India Ltd (OIL) and Bharat Petroleum Corp Ltd (BPLC) — would together pick up 23.9 per cent. The agreement for additional stake has not yet finalised, they said.

Vankor is OVL’s fourth biggest acquisition ever.

Vankorneft, a subsidiary of Rosneft, was founded in 2004 to carry out the project of the Vankor field development, the largest field to have been discovered and brought into production in Russia in the last 25 years.

It is located in the northern part of Eastern Siberia, in Turukhansky District of Krasnoyarsk Territory, 142 km from Igarka.

As of January 1, 2015, the initial recoverable reserves in the Vankor field are estimated at 476 million tonnes of oil and condensate, and 173 billion cubic meters of gas. The area of the Vankor field is 447 square kilometers. Oil and gas condensate production in 2015 was 22 million tonnes.

The 15 per cent stake will give OVL 3.3 million tonnes per annum of oil production.

Prior to the deal, Rosneft, Russia’s national oil company, held 100 per cent stake in Vankorneft.

This will be the fourth biggest acquisition by OVL. It had in 2013 paid USD 4.125 billion for a 16 per cent stake in Mozambique’s offshore Rovuma Area 1, which holds as much as 75 Trillion cubic feet of gas reserves.

In 2009, it had bought Russia-focused Imperial Energy for USD 2.1 billion. Prior to that, it had in 2001 paid USD 1.7 billion for a 20 per cent interest in the Sakhalin-1 oil and gas field off Russia’s far eastern coast.

Vankor is Rosneft’s (and Russia’s) second largest field by production and accounts for 4 per cent of Russian production.

The daily production from the field is around 442,000 barrels per day of crude oil on an average with OVL’s share of daily oil production at about 66,000. Upon completion of the deal, OVL will have two seats on the board of Vankorneft, Rosneft said.