Brussels, Belgium – On March 25, Russian oil giant Rosneft said it may join forces with Indian state-run Oil and Natural Gas Corp to supply oil to India over the long term.
Rosneft CEO Igor Sechin, an ally of Russian President Vladimir Putin, travelled to India on March 23 – as part of a wider Asian trip that included Japan, South Korea and Vietnam – to shore up ties with eastern allies at a time when Moscow is isolated by the West over its annexation of Crimea.
Energy security featured prominently in EU-US talks this week with EU countries threatening to cut their reliance on Russian oil and gas.
“While Sechin’s trip to Asia is a genuine search for new markets and new partners, it is also intended to be read as a clear message to the EU that Russian oil can find markets anywhere in the world,” Julian Lee, senior energy analyst at London’s Centre for Global Energy Studies (CGES) told New Europe on March 25.
He noted that Rosneft, the world’s top listed oil producer by output, in particular and Russia in general have been looking to diversify both oil and gas exports, just as Europe has been looking to diversify sources of supply.
“For Russia, this policy, which is much easier for oil than it is for gas, has been given added impetus by the EU reaction to events in Ukraine and renewed threats to cut Europe’s long-term reliance on Russian oil and gas,” Lee said.
Rosneft said it had also agreed with ONGC they may join forces in Rosneft’s yet-to-be built liquefied natural gas (LNG) plant in the far east of Russia to the benefit of Indian consumers.
Rosneft produces 200 million tonnes of oil a year and is looking at supplying oil to Indian refineries. “India is a very important country for Russia. We have a very efficiently run project with ONGC (Sakhalin I) … now we want to expand our co-operation,” Sechin said on March 24 after his meeting with the Indian officials.
India, which still has no firm contract to import crude oil from Russia, welcomed Sechin’s announcement, saying that the senior Indian officials would soon visit Moscow for working out the logistics for importing oil from Rosneft’s fields. India is also reportedly examining the possibility of constructing pipelines to transport the crude.
Sechin also met with ONGC Chairman and Managing Director Dinesh K. Sarraf. Rosneft had reportedly offered ONGC stakes in 10 blocks in the Barents and Black Sea.
Meanwhile, Sarraf reportedly said on March 23 that ONGC is not concerned by the sanctions imposed by the US and the EU on Russia, a country in which India’s biggest oil and gas explorer owns stakes in significant hydrocarbon assets. “If it is the UN sanctions then we are bothered. If one country or a group of countries imposes sanctions then we may not give much cognizance to that,” Sarraf said. “That may not change our commercial position. Our thoughts on the sanctions are very clear.”
ONGC Videsh Ltd (OVL), the overseas unit of the state-run explorer, owns a 20 percent stake in the Sakhalin I hydrocarbon block and had bought the Russian assets of the UK’s Imperial Energy in 2008.
http://www.neurope.eu/article/eu-eyes-energy-out-russia-looks-india
Kostis Geropoulos
Guest contributor Kostis Geropoulos is the Energy and Russian Affairs Editor of the New Europe newspaper. His weekly column, “Energy Insider,” is available at www.neurope.eu, and he can also be followed on twitter (@energyinsider)