News: India seeks energy cooperation with Russia

(RTR 30/10/2006) Moscow - India wants Russian energy companies to take part in a major expansion of its oil refining capacity in exchange for access to upstream assets in Russia, the country's oil secretary said on Monday.

M.S. Srinivasan told reporters India planned to buy 50 million tonnes a year of Russian oil in the near future, or a quarter of the country's total oil imports.

"India's Oil and Gas Corporation plans to boost its current refining capacity of 52 million tonnes per year (1 million barrels per day) to 300 million tonnes per year and welcomes Russian companies to take part in the project," Srinivasan said.

State-run Oil and Natural Gas Corp., India's largest oil producer, plans to modernise existing refineries and build a new plant with capacity of 15 million tonnes per year on the country's eastern coast, said ONGC Chairman Sarthak Behuria.

The Indian officials said commercial discussions on the expansion were under way, but did not specify which Russian companies were involved.

In return, India hopes to get more access to Russia's upstream assets and seeks to strengthen ties with energy heavyweights such as Gazprom and Rosneft.

"We have proposed creating a joint venture with Gazprom for joint bidding for exploration blocks and joint participation in exploration projects in Russia," Srinivasan said.

ONGC, already Rosneft's partner in the Exxon Mobil-led Sakhalin-1 project -- where the Indian and Russian companies each have a 20 percent stake -- planned more projects with Rosneft, Srinivasan said.

He said these could include joint exploration of Rosneft's Vankor field in eastern Siberia and participation in the Kurmangazy offshore project in Kazakhstan, in which Rosneft controls 50 percent.

India also hopes to get a share in the Sakhalin-3 offshore field to be auctioned by the Russian government. One of the Sakhalin-3 blocks is already explored by Rosneft and Chinese oil firm CNPC.