Russia offers energy assets other than those ONGC wants

Russia has offered Oil and Natural Gas Corporation (ONGC) stake in gas fields in the Arctic Peninsula of Yamal, but the Indian state-owned company is more interested in Sakhalin-3 and Vankor oilfields in East Siberia.

Energy-hungry India is keen on sourcing one million barrels per day of oil and oil-equivalent gas from Russia, and has identified Sakhalin-3 in Far East, Vankor in East Siberia, and Terbs and Titov oilfields in the Timan Pechora region.

Official sources said talks during Russian Prime Minister Vladimir Putin’s visit focused on these but the Kremlin did appear inclined to oblige New Delhi’s request.

Instead, it said Indian companies were welcome to join Russian gas monopoly Gazprom in the Yamal Peninsula. Yamal Peninsula is ranked low in ONGC’s priority as fields in northwest Siberia require huge investment and these are gas-rich fields that need conversion into LNG and have to be shipped to the Pacific.

Due to its location, LNG from Yamal cannot reach India and ONGC was more keen on oilfields, the produce from which can be shipped back home, sources said.

ONGC Videsh Ltd (OVL) already has 20 per cent stake in Sakhalin-1 oil and gas field in Far East Russia and in 2008 acquired Imperial Energy, which has fields in Siberia.

Sources said Russia did not show inclination to oblige India by exempting Imperial Energy from high taxes. Currently, most of the price above $25 a barrel of crude oil is taken away by Russia as taxes.

Sources said India wanted 10-20 per cent stake for OVL, the overseas investment arm of ONGC, in the giant Sakhalin-2 oil and gas field in Far East Russia.

Besides, a case was made for OVL joining hands with Russian firm Rosneft for exploration and development of some fields in East Siberia. Joint bidding for Trebs and Titov oilfields in Timan Pechora region and Vankor oilfield were also raised.

ONGC already has an agreement to cooperate with oil-to-telecoms group Sistema, which controls assets in Russian republic of Bashkortostan, but is not keen on going in north Russia.

The Yamal Peninsula has seen the discovery of 11 gas and 15 oil and gas condensate fields.

OVL had acquired Imperial in 2008 for $2.1 billion. High taxes in Russia mean the company gets less than one-fourth of revenue from crude oil sales.

Sources said India wanted OVL to form a 49:51 joint venture with either Rosneft or Russian gas monopoly Gazprom to pursue other oil and gas exploration opportunities in Russia.