The office, housed in the well-known landmark Federation Tower, combines the might of 5 Indian government oil and engineering companies – ONGC Videsh, IndianOil, GAIL, Oil India and Engineers India – to present a common interface for expanding cross-investments in the energy sector.
The office, inaugurated by Petroleum Secretary Tarun Kapoor, coincides with Russia courting Indian oil majors for participating in the Vostok project in the Arctic and New Delhi looking for buyers for India’s 2nd-largest state-run oil refiner and fuel retailer, Bharat Petroleum.
India is grappling with high oil prices and working towards creating a gas-based economy, closer ties with Russia, a heavyweight in the OPEC+ grouping and one of the world’s
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largest gas producers, has strategic benefits:
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it offers an alternative for India to reduce dependence on West Asian suppliers
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it adds heft to India’s leverage with other producers as the world’s 3rd-largest oil consumer
A senior diplomat at the Indian embassy told the Times of India, requesting anonymity:
- The idea of opening the energy office came from oil minister D.Pradhan when he was in Russia around the time of the PM’s (N.Modi) September 2019 visit to Vladivostok as the chief guest at the Eastern Economic Forum
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Energy ties have remained confined to Indian companies investing about $15 billion in several Russian oil fields and an LNG deal with Gazprom
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Russian investment into India has been static at a Rosneft-led consortium buying a refinery (Essar’s refinery) for $13 billion
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India wants to expand the horizon and inject dynamism in such investments
While nuclear cooperation between the 2 countries remained on a firm footing as ever, the emphasis shifted on Indian companies developing projects in the Far East and Arctic for shipping oil, gas and coking coal to India.
On its part, Russia had expressed its readiness to participate in major infrastructure anded other projects in India.
The new investment horizon appeared more promising in the backdrop of Russia’s share in the Indian arms market declining to 56% in 2019 from 72% in 2015, though Moscow still remains New Delhi’s largest arms supplier.
