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India, Russia plan big oil-gas deals

By Amit Baruah

NEW DELHI, NOV. 13. India and Russia are poised to sign an agreement during the December 3-4 visit of the Russian President, Vladimir Putin, which will transform relations.

A massive $3-billion Indian investment in two oil and gas fields — $1.5 billion in Sakhalin-III and another $1.5 billion investment in the joint Russian-Kazakh Kurmangazy oil field in the Caspian — is envisaged in the memorandum of understanding (MoU) to be signed during the visit.

The ONGC Videsh Ltd. (OVL) already has an investment of $1.7 billion in the Sakhalin-I oil field. With the new investment, India and Russia could truly speak in terms of a real partnership in the energy sector, South Block officials told this correspondent.

The Kurmangazy oil field in the Caspian Sea has the Russian State oil company, Rosneft, and the Kazakh national oil company, KazMunaiGaz, as major stakeholders, with the field estimated to have a potential of 900 million to 1 billion tonnes of oil.

During a recent visit to Moscow, the Petroleum Minister, Mani Shankar Aiyar, indicated that India-Russia energy cooperation would bloom further. "In the first half century of Indian Independence Russia has guaranteed our territorial integrity, and in the second half it may be able to guarantee our energy security," Mr. Aiyar said on October 26.

Strategic alliance

At the end of a four-day visit, Mr. Aiyar said: "What I am talking about [is] the strategic alliance with Russia in energy security, which is becoming for India at least as important as our national security."

With Indian companies such as ONGC Videsh possessing the resources to venture abroad in a big way, it is becoming clear that the Government is acting as a facilitator to ensure that Indian companies have the political support to secure key deals.

"OVL has been designated as the Indian nodal agency for overseas petroleum business and is maintained as a permanent participant in all concerned bilateral interactions and Joint Working Groups of the Government of India," the ONGV Videsh website says.

Though trade remains an area of concern for the two countries, the officials believe that the agreements in the energy sector will give a concrete meaning to the strategic partnership.

The officials said that Mr. Putin would also visit the Indian information technology industry in Bangalore to see for himself some of the IT "navratnas."

Days before Mr. Putin comes to India for the annual summit meeting (held alternately in New Delhi and Moscow), the Russian Deputy Prime Minister, Alexander Zhukov, will be here to co-chair a meeting of India-Russia inter-governmental commission on trade and economic matters. A visit by the Defence Minister, Sergei Ivanov, before Mr. Putin's arrival for the fourth annual summit is also on the cards.

India and Russia are also said to be close to clinching an agreement on visa-free travel for diplomats and officials. In all likelihood, that agreement, too, would be signed during the Putin visit, officials said. Discussions on easing regulations for the issue of business visas are also gaining steam.

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