Indo-Russian Cooperation In Oil Floundering

Indo-Russian cooperation in the petroleum sector is floundering. Both have turned down exploration blocks offered by the other.

While the official press release issued at the conclusion of the recently-held meeting of the Indo-Russian Working Group on Cooperation in Oil and Gas Industry mentioned that "the Indian side had offered some blocks for geological exploration to LUKoil while LUKoil offered similar blocks in Russia to the Indian side", these offers were rejected much before the working group meeting began.

The ONGC-Videsh Limited had offered LUKoil two exploration blocks in India on June 5, 1998. LUKoil declined the offer soon thereafter.

Similarly, LUKoil offered ONGC-VL participation in three discovered oil and gas fields in the Volga and Perm regions on July 14, 1998.

However, "on evaluation, these fields were not found to be economically viable, and as such not accepted."

On joint participation by ONGC-VL and Zarubezneft in the development of Luhais and Subbah oil fields in Iraq, the Russian firm had proposed that ONGC-VL would have to bear 100 per cent of the cost of the project to obtain 50 per cent participation rights in it. This was turned down by ONGC-VL.

However, the official press release said, "The two sides noted the continuing negotiations between Zarubezneft and ONGC Ltd, ONGC Videsh Ltd and Reliance Industries Ltd concerning possible joint participation in oil projects in Iraq and recommended continuation of these negotiations."