India, Russia to Discuss Further Enhancement in Energy Cooperation at SPIEF-2016

Indian oil minister Dharmendra Pradhan will discuss with Russian officials ways to further enhance cooperation in oil and gas sector during the St. Petersburg International Economic Forum (SPIEF-2016), the government said in a press note.

During his visit to St Petersburg, Pradhan will be meeting his Russian counterpart Alexander Novak and CEOs of Rosneft, Gazprom, Gazpromneft, Lukoil and Novatek.

During the visit of Indian Prime Minister Narendra Modi to Moscow in December 2015, both countries had agreed to further enhance cooperation in the oil and gas sector. Last month, Rosneft closed the $1.27 billion deal to sell 15 percent stake in Vankorneft to Indian state owned firm ONGC Videsh (OVL).

On September 4, 2015 Rosneft and OVL, the overseas arm on ONGC, signed the sale and purchase agreement. The document was signed by Igor Sechin, Rosneft Chairman of the Management Board, and Narendra Verma, Managing Director of OVL. The deal got Russian government's go ahead in March this year. 

This acquisition has significant strategic importance to India, both in terms of augmentation of country’s energy security as well as adding a new dimension to the relationship between Rosneft and OVL. 

Vankorneft is a 100-percent subsidiary of Rosneft, and Vankor is the largest oil and gas field discovered in Russia in the past 25 years. The field is located in the North of Eastern Siberia. Plans are in place to produce about 500 million tonnes of oil and about 182 billion cubic metres of gas jointly by the Russian and Indian sides at this field alone. 

In March, the two parties also signed an initial deal which would allow the Indian to firm buy additional 11 percent stake in Vankorneft. The finer details of this deal are yet to be worked out. 

As on January 1, 2016 Vankor field 2P reserves by PRMS classification are 265 mln tonne of oil and condensate and 88 bcm of gas, according to Rosneft website.