With Moscow facing sanctions and India’s oil needs growing, any deal could be a win-win
Fearing isolation by the West over the annexation of Crimea, Russia is now sending feelers to India’s oil and gas companies for possible tie-ups in the hydrocarbon industry.
Igor Sechin, CEO of Russian energy giant Rosneft, who is reportedly close to President Vladimir Putin, has been talking shop with Mukesh Ambani’s Reliance Industries (RIL) and state-owned explorer ONGC.
Although details of the meeting were not available, those associated with the sector said Reliance needs crude oil and is looking to strengthen its overseas exploration portfolio.
Rosneft is said to be the world’s top listed oil producer by output. For the Indian companies, there could be opportunities both in oil and gas as well as Rosneft’s proposed liquefied natural gas plant. With the softening of its position, Indian companies, which hitherto found it difficult to enter the Russian market, may find the going easier.
Asked how Indian firms would source oil from Russia if sanctions came into force, an industry source said: “There could always be a tripartite arrangement. For example, crude from Russia could be sold to a third country, from where India can source.”
As regards RIL, those in the know of the development said that with its domestic exploration business embroiled in controversies, the Ambani firm is looking for opportunities overseas. In fact, RIL has been consolidating its overseas oil and gas portfolio. It already has four blocks, two each in Yemen and Peru. Recently, it also inked contracts for two blocks in Myanmar.
The daily crude oil requirement of RIL’s two refineries is 1.25 million tonnes. At present, the company sources its crude from North Africa, Saudi Arabia, and South America.
While RIL is yet to make its mark in Russia, ONGC Videsh has a stake in the Sakhalin-1 project in Russia and has an acquired subsidiary, Imperial Energy, operating in the Tomsk region.
OVL is also in touch with Russian companies Gazprom and Novatek for further opportunities in Russia, India and third countries.