India, Russia mull new upstream joint projects, crude supply contracts: report

admin publish 2015/8/19 14:18:38

India's ONGC is in talks with Russia's Rosneft and Gazprom Neft on expanding cooperation in the energy sector, including in Russia's upstream projects and crude deliveries from the country, according to India's ambassador to Russia, Pundi Srinivasan Raghavan. 

ONGC and Rosneft "are in talks to invest in a number of fields [in Russia] and they are very much interested [in this cooperation]," Raghavan said in an interview with Russia's RIA Novosti news agency published Tuesday. 

India is also discussing a crude supply contract with Gazprom Neft, following the signing of a major supply contract between Rosneft and Indian refiner Essar in July, Raghavan said. 

India "is interested in long-term contracts on deliveries of Russian crude oil," he said, adding that the companies are currently discussing "terms and timeframes for such contracts." 

"The companies are actively studying possibilities to cooperate in a wide range of spheres, including exploration, development, transportation and refining," Raghavan was quoted as saying. 

"We hope that those talks will bring in concrete results in the near future," he added. 

Neither Rosneft nor Gazprom Neft commented on the report. 

CLOSER COOPERATION 

The energy sector deals are expected to become part of a broader cooperation agreement that the two countries are discussing ahead of a planned meeting between their two leaders later this year, although the exact date has yet to be set, according to the Indian ambassador. 

"We expect the meeting will take place at the end of the year," he said. 

Russia is increasingly looking to Asia for cooperation deals, including in the energy sector, as its relationships with Western countries have become increasingly strained of late, underpinned by sanctions imposed by the US, the EU and a number of other countries over the Kremlin's role in the Ukrainian crisis. 

For its part, India is seeking to expand its presence in Russia's hydrocarbons projects and secure greater flows of resources from the energy-reach country. 

Late last year, during a visit by Russian President Vladimir Putin to New Delhi, expectations were high that ONGC could be invited to participate in Rosneft's major greenfield project in East Siberia, the Vankor field, as well as to another East Siberian field, Yurubcheno-Tokhomskoye. 

During the visit, however, the two parties reached only a preliminary agreement on crude supplies that was finalized this July. 

The July deal envisages Rosneft taking a 49% stake in Essar's Vadinar refinery and supplying a total of 100 million mt of crude to the plant over 10 years. Deliveries are set to start once Rosneft enters the shareholder structure, the Russian company's CEO, Igor Sechin, said at the time. 

ONGC is already present in Russia. It has a 20% stake in the ExxonMobil-led Sakhalin-1 project offshore Sakhalin Island. 

Crude production at the project amounted to 122,500 b/d in 2014, up 8.8% year on year, but is expected to grow to 200,000 b/d following the launch of the third field within the project, Arkutun Dagi, in January. 

ONGC also owns Imperial Energy, which develops three small-sized fields in the Siberian Tomsk region, with crude production at around 5,800 b/d, according to the company's website. 

In addition, India's GAIL has a contract with Gazprom, under which the Russian company is to supply up to 3.5 million mt/year of LNG over 25 years, starting from 2019. 

In 2014, Rosneft and ONGC also signed a memorandum of understanding for cooperation in exploration, appraisal, and hydrocarbon production offshore Russia's Arctic region.

Prev£ºColorado appeals court refers fracking cases to state Supreme Court Next£ºNew head of Nigeria's NNPC vows to review all oil deals to shore up revenue