Russia's largest oil company Rosneft is close to acquiring a majority stake in Essar Oil Ltd and a final deal is expected to take place this week.
"Both companies are finalizing the term sheet and a deal can be announced any time this week," Livemint quoted a person familiar with the development as saying.
However, the deal size is yet to be disclosed.
The Mumbai-based Essar Group has proposed to sell 49% stake in its oil division Essar Oil, according to the sources at Rosneft.
"There are discussions going on. I cannot comment anything further," said a source close to the Russian oil giant.
According to industry watchers, Essar Oil is looking for a valuation of $8 billion for its business.
In December last year, Rosneft -- the state-owned enterprise of Russia -- had signed an agreement to export 10 million tonnes of crude oil annually to Essar Group for 10 years.
Currently, Essar Oil is operating a major refinery at Vadinar, Gujarat, with a capacity 20 million tonnes per annum. It also runs 1,600 petrol pumps across the country.
The private oil company imports a majority of oil for its refinery from Iran and it is expected to curtail such imports to give way to Russian oil.
Share prices of Essar Oil have witnessed a gain of over 50% in the past one week.