India opens Energy Office in Moscow to expand investments and procurement
India on Tuesday opened India Energy Office (IEO) in Russia with a goal to push an already burgeoning energy partnership between the two strategic partners.
The IEO in Moscow was inaugurated by Tarun Kapoor, Secretary, Ministry of Petroleum and Natural Gas, in the presence of Pavel Sorokin, Deputy Minister of Energy of Russia and D. B. Venkatesh Varma, Ambassador of India to Russia.
The IEO will cover five top Indian entities -- Oil India Limited NSE 0.08 %, ONGC Limited Videsh Limited, GAIL (India) Limited, Indian Oil Corporation Limited NSE 0.73 %, and Engineers India Limited NSE 3.67 %. The announcement to set up IEC was made by the Foreign Secretary during his recent trip to Moscow.
IEO has been opened for promoting the interest of Indian oil and gas PSUs in Russia and of Russian companies in India in the energy sector. The key objectives of IEO is to make all-out efforts for supporting the current assets, finding new business opportunities, involved in capacity building, tying for new technologies for skill development, import & export of petroleum products and services.
Russian President Vladimir Putin’s visit to India this year for the annual summit could witness new arrangements in the already burgeoning energy sector partnership.
Besides, defence, space and nuclear energy, oil & gas is a key pillar of Indo-Russian strategic partnership. To date, Indian oil and gas companies have acquired stakes in 5 Russian companies/projects at a value of about $15 bn. India wants to invest in the energy assets in the Russian Far-East besides the Arctic under the Russian jurisdiction. India is keen to explore a new sea route to source crude oil and LNG from Russian Arctic. The route has the potential to cut cost and time for transporting LNG from Russia to India.
In October 2016, Russia’s Rosneft and a consortium led by Trafigura entered into a deal with the Essar group to acquire Essar Oil’s refining and retail assets for $10.9 billion and also acquire Vadinar port and related infrastructure for another $2 billion.
The majority stake in Essar Oil was acquired by Rosneft and a consortium led by Trafigura and UCP in August 2017. The company was subsequently rebranded as Nayara Energy. It operates India’s second largest single-site refinery, with eight per cent of the country’s total capacity in the segment.
India has begun negotiations with Russia on long-term assured supplies of crude oil, especially from Russia’s Far East, and has also invited Russian companies, particularly in gas business, gas infrastructure and petrochemicals, to invest in India. Beginning 2018, Russia has started supplying LNG to India under a contract for two decades. GAIL has contracted 2.5 million tonnes per annum of LNG from Russia's Gazprom for 20 years.
The Economic Times 03-03-2021