OREANDA-NEWS. Indian state-controlled upstream firm ONGC is still in talks with Russia to acquire stakes in two large oil fields in Siberia, oil minister Dharmendra Pradhan has told parliament, without naming the areas.

ONGC has been in negotiations with Russia's state-controlled oil firm Rosneft to acquire stakes in the Vankor and Yurubcheno-Tokhomskoye fields after plans to sign initial agreements during Russian president Vladimir Putin's visit to India in December last year failed over asset prices, a company official said.

The Indian firm already has a 20pc stake in the Sakhalin 1 block in far east Russia, but its Russian upstream experience to date has been disappointing. Its \$2.1bn acquisition of Imperial Energy, ONGC's second-largest overseas investment, has disappointed with output less than a tenth of the anticipated 80,000 b/d. The deal is under investigation by Indian authorities on charges of misstating reserves and output levels.

Rosneft planned to sell a 10pc stake in the Vankor field to ONGC. Vankor is estimated to hold proven reserves of 1.5bn bl of oil and condensate, along with 95bn m? of natural gas. Rosneft also wants to jointly develop the Yurubcheno-Tokhomskoye field with ONGC, with it estimated to hold 991mn bl of oil equivalent.

Rosneft has been under pressure to raise funds by monetising assets. Russia's involvement in the conflict in Ukraine has led to stringent sanctions on its companies by western nations, choking off its flow of funds.

ONGC is also under pressure from Delhi to increase output by more than 10pc/yr, given its weak production. It will increase spending to 362bn rupees (\$5.8bn) in the 2015-15 fiscal year starting on 1 April compared with an estimated Rs348bn for 2014-15, according to the India's government annual budget.