Rosneft, the world's top listed oil producer, will get a hold in India's second biggest oil refinery as well as its 1,600 petrol pumps that will more than triple to 5,000 in two years. The Russian firm will also supply 10 million tonnes a year of crude to Essar Oil's 20 million tonnes per annum Vadinar refinery in Gujarat for 10 years.

"Rosneft and Essar Oil & Gas Ltd/Essar Energy Holdings Ltd, companies incorporated and managed under the laws of Mauritius, have signed a non-binding Term Sheet with regard to Rosneft's participation in the equity capital of Essar Oil Ltd with a share of up to 49 percent," Essar Oil said in a statement.

The proposed transaction is conditional upon various factors such as due diligence, determination of the transaction price, execution of definitive transaction documents and receipt of requisite approvals, it cited without disclosing the deal size.

Sources privy to the development stated Rosneft will pay USD 3.2 billion for the 49 percent stake. The deal, however, does not include Essar Oil's upstream portfolio comprising of five CBM blocks, holding up to 10 trillion cubic feet of gas resource as well as Ratna and R-Series oil and gas fields in the western offshore. Promoter Ruia family hold 90.5 percent of Essar Oil, of which 65.6 percent is in the form of overseas depository shares.

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