Trafigura Mulls Minority Stake in Essar Oil

Commodities trader Trafigura Group Pte is in talks to buy a minority stake in Essar Oil Ltd, which runs India's second biggest private sector refinery, in a deal that could be valued at around $6.5 billion, Bloomberg reported.

Trafigura is discussing the purchase of at least 15 percent of stake in Essar Oil while the owners of Essar Oil are interested in selling up to 30 percent, Bloomberg reported, citing people familiar with the matter. http://bloom.bg/29a3cpR

Trafigura could also get a stake in Essar's more than 2,000 retail fuel stations, a power plant and the Vadinar port, Bloomberg reported.

Reuters reported on Thursday that Essar Group is exploring the sale of its 405,000 barrel-per-day Vadinar refinery in the western state of Gujarat. nL4N19L3T2

Trafigura declined to comment.

Essar declined to comment on the news of a stake sale but said the Rosneft transaction is at an "advanced stage".

Russia's top oil producer Rosneft signed a preliminary deal last year to acquire up to 49 percent in Essar Oil. nL8N0ZO3JK

Essar, controlled by the billionaire Ruia brothers, wants to reach a deal with Trafigura by next month and intends to utilize the proceeds to pay back bank loans, Bloomberg reported.

Trafigura's main interest is the Vadinar refinery although the details haven't been finalized and the talks could still fall apart, Bloomberg reported, citing a person familiar with the matter.

There could be other potential buyers for the stake, according to Indian media reports, which could include the top ten global oil traders, including the Vitol Group and Mercuria Energy Group.

Reporting by Shivam Srivastava