The expansion of the OVL exploration activities in Russian oil fields began in 2001 with investments in Sakhakin I and the process has been intensified now with the public sector oil exploration company opting for more new areas for exploration as Russian Government and the state oil companies are seeking more investments from the Indian companies following sanctions from the western countries due to Ukraine crisis. This suits India also as Russian fields offer huge opportunities for strengthening India’s energy security since India import nearly three fourth of its requirements of oil and this level will go up in the coming years. Indian companies have not yet been able to explore enough new oil wells to produce for meeting the increasing demand. This requires that India should focus on new fields in foreign countries including Russia and shore up its oil supply from these oil assets abroad.

The Goa summit statement took note of this imperative for India and the joint statement mentioned that with the aim of further strengthening oil and gas cooperation, the Russian side expressed its interest in attracting Indian companies to participate in joint projects in the offshore Arctic fields of the Russian Federation. Already Indian scientists are active in data collection work in Arctic region and the Indian work has been highly appreciated by the UN. India can have the benefit of getting oil at cheaper costs if it collaborates with the Russian companies in the region for oil exploration and development.

Right now, there is an appeal from Russia to the United Nations Tribunal concerning border of its continental shelf in Arctic. Moscow sees its move as another example of using International Arbitrage in a territorial dispute and appealing to the International Convention on Maritime Law unlike Washington which denies its ratification. The US is opposing the Russian plea on the border issue.

Since Arctic region is the vast resource base of hydrocarbons and President Putin in his joint statement has assured of joint projects with India in Arctic region, it will be in India’s interest to extend support to the Russian position on the border issue in Arctic which Moscow has vindicated through lot of studies. With the present level of relationship between India and Russia in energy sector, India can expect good access to the Arctic reserves with Russian cooperation and that will be a big boost to India’s long term stability in oil supplies.

Russia was the world’s largest producer of crude oil including lease condensate and the third largest producer of petroleum and other liquids, after Saudi Arabia and United States in 2015.Russia was the second largest producer of dry natural gas in 2015, second to the United States producing 22.4 trillion cubic feet. Russia had 39 oil refineries with a total crude oil distillation capacity of 5.5 million barrels per day as of January 1, 2016.Rosneft, the largest refinery operator, owns nine major refineries in Russia while Lukor is the second largest operator of refineries in Russia with four major refineries. Many of Russia’s refineries are older, simple refineries, with low quality fuel accounting for a large share of their output.

A country report on Russia prepared by the US Energy Information Administration says that with Russia’s traditional oil producing regions in decline, East Siberian fields will be central to continued oil production expansion efforts. The region’s potential was increased with the inauguration of Eastern Siberia- Pacific Ocean (ESPO) pipeline in December2009 which created an outlet for East Siberian oil. East Siberia has become the centre of production growth for Rosneft, the state oil giant. The start up of the Vankor oil and natural oil and gas field in August 2009 has notably increased production in the region and has been a significant contributor to Russia’s increase in oil production since 2010.Vankor, located north of Arctic Circle in Russia’s Krasnoyars region, was the largest oil discovery in Russia in 25 years. In 2015, the field produced about 440,000 barrels per day.

OVL is now a part of this Vankor oil fields and that gives India a big opportunity to expand its oil assets further in this region which has emerged as the most productive in the country.. There are a number of other fields in the region including Verkhnechonskoye oil and gas field. The process has started in full swing and India’s capability in oil exploration has been widely appreciated in Russia. This is the right time to expand at a breakneck speed to expand India’s oil assets in Russian Federation. Entering Arctic region as a collaborator will be a golden opportunity for India. (IPA Service)