Russia’s state-owned Rosneft and India’s ONGC signed an agreement on Thursday to broaden cooperation, following the lines of Rosneft’s earlier deal with China. India hopes to take part in developing Sakhalin-3 and Vankorskoye oil fields. Defense Minister Sergey Ivanov has actually promised this to the Indians. Rosneft, however, has set its mind on keeping the vast Vankorskoye field closed to any overseas investors.
As part of a meeting between Indian Prime Minister Manmohan Singh and Russian President Vladimir Putin, Rosneft and ONGC signed a protocol Thursday to broaden cooperation and carry out projects in Russia, India and other countries. The companies will set up two joint task forces to develop partnership in oil and gas production as well as in processing and sales. Joint ventures are also expected to be created for new projects. ONGC and Rosneft are currently engaged in the Sakhalin-1 project which is operated by Exxon’s subsidiary.
The Russian-Indian agreement is based on the principles already in use in Rosneft’s deal with Chinese CNPC. On October 16, Rosneft and CNPC signed a protocol to set up the Vostok Energy company for exploration work and oil and gas production in Russia. Rosneft holds 51 percent in the company with a majority at the board of directors. Cooperation between ONGC and Rosneft is most likely to follow along the same lines.
Several days before the meeting, Defense Minister Sergey Ivanov said Russia was “interested in the participation of Indian capital in developing the Vankorskoy field and the Sakhalin-3 project”. The Indians have been declaring their interests to these projects for a few years already.
The Veninsky part of Sakhalin-3 is run by a joint venture of Rosneft and Sinopec. The two remaining parts of Sakhalin-3, however, are yet to be put out to tender. The result of the first tender, where Exxon and Chevron were declared winners, has been overturned. ONGC may decide bid at new actions on its own, or together with Rosneft. Neither Russian authorities nor Rosneft seems to mind the former. Yet, Rosneft is still wary about foreigners developing the Vankorskoye gas and oil field. “This option is not considered,” Rosneft responded to Kommersant’s official inquiry about the plans on overseas participation in the project.
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