India and Russia on Friday discussed expanding cooperation in the energy sector as New Delhi looks at newer sources of oil and natural gas to diversify its import basket. Oil Minister Hardeep Singh Puri held a video interaction with Russian Energy Minister Nikolay Shulginov on furthering energy cooperation between the two nations, the Indian minister tweeted.
India's cumulative investment in oil and gas projects in Russia exceeds USD 15 billion. It is the single largest destination of Indian overseas investment in the oil and gas sector. Russian oil giant Rosneft and its partner in 2017 bought Essar Oil, renamed Nayara Energy, for USD 12.9 billion.
"Had an engaging video interaction with HE Mr Nikolay Shulginov, Minister of Energy of the Russian Federation @MinenergoGov. Discussed ways to further expand bilateral energy cooperation, a key pillar of bilateral Special & Privileged Strategic partnership," Puri tweeted. Russia, he said, is the largest investor in India's energy sector and India has made significant investments in the Russian oil and gas sector.
"Reviewed the ongoing investments by Indian oil & gas companies in the upstream sector in Russia, supply of LNG & crude oil from Russia," he said. "We also reviewed Russian investments in India's downstream sector." Last year, state-owned Indian Oil Corp (IOC) signed a deal with Rosneft for the annual purchase of 2 million tonne of crude oil. This is the first-ever annual oil purchase deal between the two countries. India is also looking to import liquefied natural gas (LNG) from Russia and is looking for opportunities for involvement of Indian companies in infrastructure development projects in the Siberian and Arctic regions, the Indian oil ministry had said at the time of signing of the deal with Rosneft in February last year.
India traditionally relies on the Middle East for the bulk of its oil and gas needs and is now exploring sources from Russia to the US to diversify that basket. Puri said he thanked Minister Shulginov for the invitation to participate in the 6th Eastern Economic Forum from September 2-4, 2021 in Vladivostok.
India is looking to bolster its economic presence in the Russian Far East. During a 2019 visit to the Far Eastern port city of Vladivostok, Prime Minister Narendra Modi announced that New Delhi would provide a USD 1 billion loan to aid the region's economic development. He also signed a memorandum to establish a direct maritime corridor between Chennai and Vladivostok.
The new sea route is expected to cut the shipping time for goods between India and Russia to 24 days, versus 40 days via an European route. The Fast East has huge oil and gas reserves and New Delhi is interested in securing a pie of that.