Indian companies eye Russian oil fields | Daily News


Indian companies eye Russian oil fields

A consortium of Indian oil firms is in talks to buy a significant stake in the eastern cluster oil fields in Russia with investments running into billions of dollars.

This comes after Indian oil firms have recovered more than one-third of their $5 billion investments made in Russia within the last three years as dividend after accounting for capital expenditure and operational expenditure.

Deal at summit

A deal is likely to be announced at the Eastern Economic Forum and the Annual Bilateral Summit between Prime Minister Narendra Modi and Russian President Vladimir Putin in Vladivostok next week, sources in the know of the development told The Hindu.

“It’s a combination of producing assets and discovered assets that will be put on production soon. We need to see what kind of fields are likely to be clubbed [into] these assets. So, it is premature to talk about reserves and valuations, but we are putting in our expression of interest,” a source said.

Minister for Petroleum and Natural Gas and Minister of Steel Dharmendra Pradhan is already in Russia with a delegation of Indian oil firms and Indian Oil Corporation Ltd. chairman Sanjiv Singh for exploring partnerships with Russian firms. Indian firms are expected to invest in Russia’s upstream sector while Russian firms are expected to invest in India’s downstream sector. Mr. Pradhan met Russia’s energy minister Alexender Novak and discussed Indian firms’ interest in investing more in Russian oil and gas fields. “Discussions [helped] recognise that there are still enormous opportunities for investments in oil and gas assets in Russia, and Russian investments in new initiatives launched [will help] transform India into a gas-based economy through CGD, LNG terminals and use of natural gas in transportation,” Mr. Pradhan tweeted after meeting his Russian counterpart.

Mr. Pradhan also met Russian Deputy Prime Minister Yuri Trutnev and discussed further cooperation in sourcing of crude oil from Far East of Russia.

D. Rajkumar, chairman, BPCL, said, “We are keeping some money [aside] for investment in upstream assets. As far as Russia is concerned, out of our $1 billion investment, we have recovered $340 million in the last three years by way of dividend, after accounting for capex and opex.”

Indian energy companies have so far invested close to $10 billion in acquiring stakes in hydrocarbon assets in Russia.

(The Hindu)

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