Russian President Vladimir Putin made a quick 5-hour visit to India. However, considering it to be just his second foreign visit during the pandemic, it highlighted the importance Russia attaches to ties with India. Some of the most talking points about the deal were regarding the defence sector. Of course, majorly significant deals happened in this area. However, another industry caught less attention where both the grand-old friends entered into some crucial pacts, and that is the energy sector.
The facts that Russia is the world’s third-largest oil producer, the second-largest gas producer and one of the propagators of the ‘OPEC+’, which is now more significant than OPEC, are enough to highlight Russian geoeconomic importance.
Indian Oil Corporation
One of the most significant deals signed during President Putin’s visit was between Russia’s Rosneft and the Indian Oil Corporation (IOC). Under it, Rosneft will supply IOC 2 million tonnes of crude oil in 2022. The supply will happen from the Russian Black Sea port of Novorossiysk. IOC-Rosneft ties are deep, and IOC holds a stake in quite a few Rosneft projects in Russia, including Vankorneft and Taas-Yuryah.
Also, IOC has signed two Statements of Intent of Collaboration with a couple of Russian companies. First is Russian oil giant Gazprom with whom IOC is considering a potential technical tie-up, while the other is Russian petrochemicals company Sibur for collaboration at IOC’s Paradip refinery in Odisha.
Although a conventional energy giant, Russia also talked about strengthening non-conventional energy cooperation with India. Both sides have identified hydro and thermal energy to expand mutual cooperation.
Also, the joint statement issued after the talks notably mentions making Russia a member of the India-led International Solar Alliance.
During President Putin’s visit, Russia reaffirmed its commitment to increase its crude oil production under long-term contracts at preferential prices and increase LNG imports to India. Russia has said that it could also use the Arctic Northern Sea Route for energy supplies.
Some of the other energy deals signed during President Putin’s visit are:
– IOC and Russian oil major Rosneft also signed a memorandum of understanding (MoU) with India’s ONGC Videsh. It seeks to promote education and training in the oil and gas sector.
– Apart from Rosneft, Russia’s Gazprom Neft has also worked out a deal with IOC. Under it, both the companies will collaborate in vacuum gas oil hydrocracking technology and a couple of other technical areas.
– India’s NTPC and Russia’s Inter RAO-Export signed an MoU to provide services for capability building in power sector exports jointly.
– Moscow has also agreed to expand its participation in the Indian petrochemical sector through investment and technological or other means. Moreover, New Delhi and Moscow have also agreed to expand cooperation in – the development of each others gas infrastructure and distribution projects, the use of natural gas in transport and emerging fuels, considering the addition of hydrogen to the energy mix.
Recently, JP Morgan Global Equity Research had predicted oil prices to touch $150 per barrel. If such an estimate comes true, it could mean a lot of trouble for a leading energy importer like India. Thus, these energy deals with Russia set the stage for deepening Indo-Russia energy cooperation for the times when energy security will hold the key.