India Negotiating Investments In Russian Arctic Oil & Gas Exploration
Free Trade Agreement also in the pipeline
India is negotiating investments of between two and three billion dollars in Russian oil and gas exploration and production projects with the Russian government, according to India’s Business Standard newspaper.
Apparently, the Russian government has offered several oil and gas fields to India’s natural resources exploration firm ONGC Videsh and to any potential consortium it may form for the project. An unnamed official stated “This will be for exploring and producing oil and gas in Russia. While the project and scope have not been finalized, talks have begun.”
Sources say the countries are also in talks over India’s investment in oil and gas exploration projects in the Arctic, including the development of the Vostok Oil project. The project’s annual crude production could be up to 100 million tons, according to preliminary estimates.
The cited sources stated that three Russian Far Eastern regions, namely Yakutia, Sakhalin Oblast and Amur Oblast, have so far shown interest in investment by India in their oil and gas sectors.
India sees oil and gas-related interaction with Russia as a “flagship sector of commercial cooperation between the two nations.” India’s Foreign Secretary Harsh Vardhan Shringla has said. India has been looking at extending economic ties with Russia in areas such as coking coal, timber and liquefied natural gas (LNG), as it sees great potential there.
India is currently negotiating a Free Trade Agreement with the Eurasian Economic Union of which Russia is the main partner. Russia and India already have an economic shipping corridor operating between Chennai and Vladivostok, with links also extending West with the North-South International Transportation Corridor (INSTC) providing a multi-modal link between Mumbai and Russia’s huge Volga River network at Astrakhan. Both countries are members of the BRICS trade bloc and the Shanghai Cooperation Organisation.
Russia and India have declared intentions to develop bilateral trade by US$5 billion per annum for the coming decade to reach US$30 billion by 2025.
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