Russia's decision to open up its oil and gas sector will not only boost trade with India, it will also go a long way in helping India to move towards energy security. Nearly 80 per cent of India's oil requirement is mported. India does not have any major source of oil though there are some gas reserves, which too is far from adequate.

With this decision, which was announced during Prime Minister Narendra Modi's visit to Russia last week, the two sides have already negotiated on some new acquisitions and projects by India in the hydrocarbons sector, India's ambassador to Russia, P.S. Raghavan has said after Modi's visit.

This is apart from number of deals struck between Indian and Russian oil firms during Modi's visit on December 23 and 24.. The deals sealed in the oil sector include ONGC Videsh Ltd buying a 15 per cent stake in Russia's Vankorneft oil field for close to $1.3 billion. Vankorneft is Russia's second biggest oil field and is owned by oil behemoth Rosneft. Indian oil companies have already invested over $8 billion in Russian oil fields.

The cooperation with Russia in the hydrocarbon sector came closer to another significant development in early December — that is launching of the 1,735 km gas TAPI pipeline project, which is expected to be ready by 2019.

Nearly 200 kilometers of the pipeline will pass through the territory of Turkmenistan, 735 kilometers through Afghanistan, 800 kilometers through Pakistan and will reach Fazilka in India. The pipeline will export up to 33 billion cubic meters of natural gas a year from Turkmenistan to Afghanistan, Pakistan, and India over 30 years.

With Russia's grand plan for capital expenditures in the energy sector that is expected to raise to $800 billion from 2031-2035, against $460 billion for 2011-2015, there is huge opportunity for India to further strengthen the bilateral cooperation in hydrocarbons Russia considers its huge oil and gas reserves as strategic resources and is allowing Indian firms extensive exposure to them in sync with close bilateral ties.

India is one of world's fastest growing energy markets, has been eyeing greater access to major gas and oil exploration projects in Russia and central Asian countries. Russia is a major hydrocarbon power. We are a major hydrocarbon consumer. Our energy security depends on hydrocarbons. So there was a conscious decision that India should increase its footprint in Russia's hydrocarbons industry.

ONGC Videsh Ltd is exploring more acquisitions in Russian oil fields besides working on some other proposals. The quantum of new Indian investment in Russia's hydrocarbon sector is yet to ascertained.

Russia's economy has been hit hard by sanctions by the West following developments in ukraine and President Vladimir Putin is keen to enhance economic engagement with its ally India.

Besides the deal by OVL to pick up 15 per cent stake in Vankor oil field owned by Rosneft, Oil India Ltd and Indian Oil Corporation signed a non-binding agreement with the Russian oil behemoth setting a time-frame for finalising a pact to pick up stakes in Taas-Yuryakh Neftegazodobycha oil field, which is another major oil field in Siberia.

Essar has also almost finalised a deal to pick up 10 million tons of crude from Roseneft. Roseneft will pick up 49 per cent stake in India's second largest oil refinery in Vadinar in Gujarat. As per the deal, crude oil from Russia will be refined at Vadinar refinery.

India and Russia are also studying the possibility of hydrocarbon pipeline system connecting Russia and India. The first meeting in this regard was held in Moscow in November as part of the Programme on Enhanced Cooperation in the Oil and Gas sphere signed in New Delhi in December last year.

The Joint Statement issued at the end of Modi's visit to Russia said the two Sides noted the interest of JSC Zarubezhneft in cooperating with Indian partners in upstream oil and gas projects in Russia, India and third countries. Cooperation in oil recovery technologies and provision of oil field services for onshore and offshore Indian oilfields are to be intensified.

The two sides are also expected to cooperate in joint projects that had potential for LNG supply to India from JSC project Arctic LNG on the resource base of the fields located on the Gydan Peninsula and partly in the Gulf of Ob. This is in addition to Gazpron Group and India's Gail agreeing for LNG shipments of 2.5 million tons a year for the period of 20 years. LNG shipments for this contract are expected to begin anytime between 2017-21.

Indian $8 billion investment in Russia's hydrocarbons included Imperial Energy Tomsk; Sakhalin I; Volzhsky Abrasive Works Volgograd. As 2015 ends, there is certainly a forward movement towards India's energy security. The launching of TAPI gas pipeline project and opening of Russia's hydrocarbon sector are a welcome development. It is not only oil sector but also in Nuclear Energy Russia has agreed to cooperate with India in building 20 nuclear power reactors in the country. Two of 1000 mw each have already been built in Kukamkulam in Tamil Nadu and work on two more are to begin shortly. Six such reactors are to be built in a new site in Andhra Pradesh. India and Russia have agreed to cooperate in Solar Energy India proposed to have One Lakh Mw of solar power by 2022. All these augur well for the two economies. (IPA Service)