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(Image courtesy of PetroNeft)

Russia’s PetroNeft Resources has entered into a binding agreement with India’s second-largest oil explorer Oil India (OIL) to sell 50 percent of its stake in Licence 61 at Tomsk Oblast, Russia.

Under the terms, OIL will invest $85 million broken down by an upfront payment of $35 million, $45 million in exploration and development expenditure, and $5 million in performance bonus.

The expected closing date of the deal is the end of May.

PetroNeft said it will use the proceeds of the deal to reduce its debt and invest in the development.

OIL will receive 50 percent of production and reserves at Licence 61.

PetroNeft will remain the operator.