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Efforts on JVs with Russian oil giants during Putin visit

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India, which has virtually failed to make any headway in Russia's energy sector after an investment of $1.7 billion in the Sakhalin-I oil and gas fields in 2001, is once again hopeful of signing a host of agreements with Russian oil and gas majors - Rosneft and Gazprom - during the visit of the Russian President Vladimir Putin to New Delhi later this month.

On the agenda is to have in place a proposed joint venture agreement between ONGC Videsh Ltd (OVL) and Rosneft for bidding in Sakhalin-III, Trebs and Titov blocks in the Timan Pechora region besides a participation in Vankor and Kurmangazy projects. A joint venture between OVL and Rosneft/Gazprom for participation in E&P blocks in Russia has also been proposed.

Petroleum minister Murli Deora has written to Prime Minister Manmohan Singh to push for these opportunities with President Putin besides discussing India's vision to source one million barrels of oil and oil equivalent gas per day from Russia in future. OVL has also expressed interest to align with a Russian company to develop the Sakhalin gas as an LNG project.

It is significant to point here that this is not for the first time that India will take up these proposals with Russia. These were first discussed in October 2004 when the Indian petroleum minister visited Moscow. Specific projects including Vankor, Sakhalin-3 and Kurmangazy were discussed in November 2004 at the 10th meeting of the Indo-Russian working group on co-operation in oil and gas industry.

However, despite repeated efforts by OVL to enter into joint bidding pacts with Rosneft for Sakhalin-III, Trebs and Titov blocks, no agreement has been signed so far. OVL has also proposed to Rosneft and Gazprom for floating a JV pact for joint participation in E&P blocks in Russia but not much progress could be made on this front.

With huge reserves of oil and gas, Russia is fast emerging as the world's energy superpower. OVL's 20% stake in Sakhalin-I fields is fetching the country 2.4 million tonne of crude per annum. President Putin is in New Delhi to participate in the Republic Day celebrations.

OVL is eyeing oil fields in East Siberia, which is estimated to hold some 20 billion barrels of reserves. It is also looking at participating in Russian continental shelf that may contain oil and gas in 4 million sq km of its total area of 6.5 million sq km.

Also, likely to figure during discussions is OVL's participation in the 3.2 trillion cubic meters super giant gas field Shtokman and Prirazlomneye oilfield, which holds recoverable oil reserves of more than 83 million tonne.

© The Financial Express

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