Modi’s oil diplomacy in Russia: Indian oil PSUs to benefit

Prime Minister Narendra Modi with Russian President Vladimir Putin in Moscow.

PRIME Minister Narendra Modi’s just concluded Russia visit was significant for more than one issue. The visit provided a boost to the Indian oil PSUs as it steered clear the way for more collaboration between Indian oil major s and their Russian counterparts. Adding yet another feather to its glorious cap, ONGC Videsh Limited (OVL), the overseas arm of ONGC, has entered into a pact with Russian oil behemoth Rosneft. The pact will allow OVL to pick up 15 per cent stake in Russia's second biggest oil field of Vankorneft. India and Russian oil companies also inked three other major pacts during Prime Minister Narendra Modi's visit...
which is expected to boost bilateral trade significantly.
India has been pressing for access to its oil major s in Russia's lucrative hydrocarbons sector. Now, these pacts finalised are likely to facilitate their significant presence in oil and gas exploration in the Eurasian country.
As per the deal between OVL and Rosneft, the former will pick up 15 per cent stakes in Vankorneft oil fields in Siberia for $1.3 billion.
OVL and Rosneft also signed a memorandum of understanding (MoU) for cooperation for geologic survey, exploration and production of hydrocarbons onshore and on the continental shelf of the Russian Federation.
In another breakthrough, Oil India Ltd and Indian Oil Corporation signed a non-binding agreement with Rosneft setting time-frame for concluding due diligence and closing a pact to pick up stakes in Taas-Yuryakh Neftegazodobycha oil field, which another major oil fields in Siberia.
India's Ambassador P S Raghavan said OVL signed another MoU with Rosneft expressing interest in a number of oil fields both in arctic shelf and in other parts of Syberia near Vankorneft and the intention for striking a deal.
He said Indian oil major Essar has concluded some details of a deal under which they will pick up 10 million tonnes of crude from Roseneft. Roseneft will pick up 49 per cent stakes in India's second largest oil refinery in Vadinar in Gujarat. As per the deal, the crude oil that goes from Russia will be refined at Vadinar.
India has been pushing for greater involvement in major gas and oil exploration projects in Russia. Russia is one of the top oil producers globally and has huge reserves of natural gas.
A joint statement issued after Modi's summit talks with Russian President Vladimir Putin welcomed the deals in the oil and gas sectors.
The two sides welcomed the announcement of several major bilateral investment proposals and called on companies in both countries to finalise new and ambitious investment proposals in promising sectors such as oil and gas besides in some other areas.
"With one of the world's largest reserves of hydrocarbons, Russia can be a critical source of energy security for India, especially because of our strategic partnership. With President Putin's support, we are enlarging Indian investments in Russian hydrocarbon sector," Modi said at a joint media briefing with Putin at Kremlin last night.
Putin said an agreement between Rosneft and Essar envisaged large-scale deliveries of oil and petroleum products to Indian refineries - up to 10 million tonnes a year over a period of 10 years.
The two sides noted the continued interest of Indian companies in investing in the hydrocarbon sector in Russia, in particular discussions between Rosneft and Oil India limited on promising investment projects, and called for early finalisation of new investment proposals.
The two countries expressed satisfaction over cooperation between Gazprom Group and its Indian partners in LNG trade.
"The Russian side welcomes the interest and involvement of Indian partners with regard to cooperation in joint projects stipulating the possibility of LNG supply to India from JSC NOVATEK project Arctic LNG on the resource base of the fields located on the Gydan Peninsula and partly in the Gulf of Ob," the statement said.