Indian owing to her traditional strategic ties with Russia can rely on Russia as a very reliable supplier of crude oil.
Below is an account of capacity of Russia to produce crude oil and gas.
Russia has in her reserve 17 billion tons of oil and 48 trillion cubic meters of gas. The promising oil and gas bearing areas cover a region of 5.2 to 6.2 million square kilometers. The highly potential oil and gas fields of the Russian shelves ensures the security of the hydrocarbon supply in Russia in the foreseeable future beyond any doubt. The geological and geophysical explorations of the aforesaid resources have not extensively explored.
Two giant oil and basins of gas found in the West Arctic found on the shelves of the Barents and Kara Seas cover an area of 2 million square kilometers. They contain resources of at least 50 to 60 billion tons of conventional fuel . The regional exploration revealed the existence of ten prolific oil and gas fields. The resource of only two of them in Rusanovskoe and Leningradskoe in the region of the Kara Sea combined is estimated to be 5 trillion cubic meters of natural gas. The Shtokmanovskoe gas field in the Barents Sea, and the Prirazlomnoe oil field in the area of Pechora Bay merits special interest. The gas condensate field of Shtokmanovskoe is in all possibility the world's largest known offshore gas field. Its projected reserves are about 3 trillion cubic meters of gas and gas condensate of greater than 20 million tons. More than 200 million tons oil is reserves present in Prirazlomnoe field amounts . A gas condensate field is estimated to produce up to 80-100 billion cubic meters of natural gas in the Jamal area per year. Geological reserves of just one of the five giant fields located at Odopinskoe amounts to over 200 million tons of oil and 0.1 trillion cubic meters of gas. In the whole of shallow shelf of the Caspian Sea specially its northern part deserves a special mention. The hydrocarbon resources of the area are estimated at 2-3 billion tons, with oil accounting for 70% of the potential energy reserves. The details of Russia's oil and Gas reserve is very large and beyond the scope of this discussion. (Details of Russia's oil and gas reserve will feature as a hyperlink to a saparate document)
The opportunity that presented from the withdrawal of many American and European companies from exploration and extraction of these vast reserves ,due to the light of annexation of Crimea by Russia , at least three Indian companies including state-owned Indian Oil Corporation and ONGC Videsh, were in discussions for significant hydrocarbon deals to Russia.The proposals also included joint extraction of oil and gas from Russia’s Arctic shelf deposits. This happened within a short span from Russia’s biggest oil company Rosneft OAO acquiring significant equity state in Essar Oil, a private sector company in India. On 8th May 2015 Russian government had announced plans to invite Indian companies to jointly extract oil and gas from Russia’s Arctic shelf deposits. Rosneft had offered to sell 10 per cent stake in the Vankor oilfield in Siberia to ONGC Videsh. Taking the opportunity early this year ONGC Videsh’s interest in Siberia included talks of acquisition of a stake in Vankor and Yurubcheno-Tokhomskoye fields of Russia. As part of its plans to source one million barrels per day of oil and oil-equivalent gas from Russia, ONGC Videsh is keen on expanding its presence in Russia. ONGC Videsh has 20 percent stake in the Sakhalin-1 oil and gas field in eastern Russia already. In 2009 it acquired Imperial Energy, which had fields in Tomsk region, in Russia for $2.1 billion. As a new development in 2014, Russia’s state-controlled oil company Rosneft signed a memorandum of understanding with ONGC for implementation of joint projects in Russia’s offshore Arctic.
Russian oil industry is also setting its foot prints in Indian oil companies. Rosneft on 8th July 2015 had confirmed that it had signed a preliminary deal with Essar Oil to buy its 49 percent stake which has India's third largest oil refinery in Vadinar . A deal had materialized with Rosneft for a supply of the amount of 200,000 barrels of oil per day for the next 10 years to the refinery. Following a chill in relations with the West over Moscow's role in the Ukraine conflict, the materialization of the deal is consistent with Rosneft's aim to send 40 percent of its oil exports to Asian markets by 2019. Through this deal Rosneft aims to cement its position in India and envisions to capture greater market share from Saidu Arabia. Through this deal Russia is trying to find a new long-term market for crude oiloutside European Union to minimize the risk of disruptions.
The bilateral trade between Indian and Russia in the last ten years have increased 4.6 times. While in 2004 it amounted to USD 2 billion in 2014 it had escalated to USD 9.5 billion. In 2014 itself Indian exports to Russia grew by 2.6%. In 2014 imports of alimentary products rose by 35.3%, from USD 104 to 142 million.
The amount of import of cray fish grew more than 2 times from 38 million to 68 million USD and imports of frozen vegetables rose from near zero to greater than USD 3.5 million.
Indian exporters are keen to fill the void created in the supply of Russian commmodities of cosumption due to Russian ban on the import of food and agricultural products from the US and the European Union (EU) in retaliation to the imposition of sanctions against it. Russia is dependent on foreign countries for
about two-fifths of its food supplies, and spends $ 2.7 billion a year on European fruit and vegetables along with imports of large quantities of meat, dairy products and processed foods. Due to the ban on import of food from US and EU, India has ample opportunity to export the necessary products to Russia
which will bolster mutual trade between the companies of India and Russia.
Below is a small account of Indian exports to Russia in 2014:
Pharmaceuticals: $819.1 million, Electronic equipment: $382.3 million, Machines& engines & pumps: $159.4 million, Iron and steel: $149.1 million, Clothing (not knit or crochet): $135.7 million, Coffee, tea and spices: $131.7 million, Tobacco: $113.9 million, Vehicles: $111.1 million, Knit or crochet clothing: $97.9 million, Other food preparations: $77.7 million.
Even with such enhancements in bilateral trade there is ample scope of growth left to materialize between the two countries. A substantial interaction between the business communities of both countries is needed in order for bilateral trade to flourish further.
Russia has in her reserve 17 billion tons of oil and 48 trillion cubic meters of gas. The promising oil and gas bearing areas cover a region of 5.2 to 6.2 million square kilometers. The highly potential oil and gas fields of the Russian shelves ensures the security of the hydrocarbon supply in Russia in the foreseeable future beyond any doubt. The geological and geophysical explorations of the aforesaid resources have not extensively explored.
Two giant oil and basins of gas found in the West Arctic found on the shelves of the Barents and Kara Seas cover an area of 2 million square kilometers. They contain resources of at least 50 to 60 billion tons of conventional fuel . The regional exploration revealed the existence of ten prolific oil and gas fields. The resource of only two of them in Rusanovskoe and Leningradskoe in the region of the Kara Sea combined is estimated to be 5 trillion cubic meters of natural gas. The Shtokmanovskoe gas field in the Barents Sea, and the Prirazlomnoe oil field in the area of Pechora Bay merits special interest. The gas condensate field of Shtokmanovskoe is in all possibility the world's largest known offshore gas field. Its projected reserves are about 3 trillion cubic meters of gas and gas condensate of greater than 20 million tons. More than 200 million tons oil is reserves present in Prirazlomnoe field amounts . A gas condensate field is estimated to produce up to 80-100 billion cubic meters of natural gas in the Jamal area per year. Geological reserves of just one of the five giant fields located at Odopinskoe amounts to over 200 million tons of oil and 0.1 trillion cubic meters of gas. In the whole of shallow shelf of the Caspian Sea specially its northern part deserves a special mention. The hydrocarbon resources of the area are estimated at 2-3 billion tons, with oil accounting for 70% of the potential energy reserves. The details of Russia's oil and Gas reserve is very large and beyond the scope of this discussion. (Details of Russia's oil and gas reserve will feature as a hyperlink to a saparate document)
The opportunity that presented from the withdrawal of many American and European companies from exploration and extraction of these vast reserves ,due to the light of annexation of Crimea by Russia , at least three Indian companies including state-owned Indian Oil Corporation and ONGC Videsh, were in discussions for significant hydrocarbon deals to Russia.The proposals also included joint extraction of oil and gas from Russia’s Arctic shelf deposits. This happened within a short span from Russia’s biggest oil company Rosneft OAO acquiring significant equity state in Essar Oil, a private sector company in India. On 8th May 2015 Russian government had announced plans to invite Indian companies to jointly extract oil and gas from Russia’s Arctic shelf deposits. Rosneft had offered to sell 10 per cent stake in the Vankor oilfield in Siberia to ONGC Videsh. Taking the opportunity early this year ONGC Videsh’s interest in Siberia included talks of acquisition of a stake in Vankor and Yurubcheno-Tokhomskoye fields of Russia. As part of its plans to source one million barrels per day of oil and oil-equivalent gas from Russia, ONGC Videsh is keen on expanding its presence in Russia. ONGC Videsh has 20 percent stake in the Sakhalin-1 oil and gas field in eastern Russia already. In 2009 it acquired Imperial Energy, which had fields in Tomsk region, in Russia for $2.1 billion. As a new development in 2014, Russia’s state-controlled oil company Rosneft signed a memorandum of understanding with ONGC for implementation of joint projects in Russia’s offshore Arctic.
Russian oil industry is also setting its foot prints in Indian oil companies. Rosneft on 8th July 2015 had confirmed that it had signed a preliminary deal with Essar Oil to buy its 49 percent stake which has India's third largest oil refinery in Vadinar . A deal had materialized with Rosneft for a supply of the amount of 200,000 barrels of oil per day for the next 10 years to the refinery. Following a chill in relations with the West over Moscow's role in the Ukraine conflict, the materialization of the deal is consistent with Rosneft's aim to send 40 percent of its oil exports to Asian markets by 2019. Through this deal Rosneft aims to cement its position in India and envisions to capture greater market share from Saidu Arabia. Through this deal Russia is trying to find a new long-term market for crude oiloutside European Union to minimize the risk of disruptions.
The bilateral trade between Indian and Russia in the last ten years have increased 4.6 times. While in 2004 it amounted to USD 2 billion in 2014 it had escalated to USD 9.5 billion. In 2014 itself Indian exports to Russia grew by 2.6%. In 2014 imports of alimentary products rose by 35.3%, from USD 104 to 142 million.
The amount of import of cray fish grew more than 2 times from 38 million to 68 million USD and imports of frozen vegetables rose from near zero to greater than USD 3.5 million.
Indian exporters are keen to fill the void created in the supply of Russian commmodities of cosumption due to Russian ban on the import of food and agricultural products from the US and the European Union (EU) in retaliation to the imposition of sanctions against it. Russia is dependent on foreign countries for
about two-fifths of its food supplies, and spends $ 2.7 billion a year on European fruit and vegetables along with imports of large quantities of meat, dairy products and processed foods. Due to the ban on import of food from US and EU, India has ample opportunity to export the necessary products to Russia
which will bolster mutual trade between the companies of India and Russia.
Below is a small account of Indian exports to Russia in 2014:
Pharmaceuticals: $819.1 million, Electronic equipment: $382.3 million, Machines& engines & pumps: $159.4 million, Iron and steel: $149.1 million, Clothing (not knit or crochet): $135.7 million, Coffee, tea and spices: $131.7 million, Tobacco: $113.9 million, Vehicles: $111.1 million, Knit or crochet clothing: $97.9 million, Other food preparations: $77.7 million.
Even with such enhancements in bilateral trade there is ample scope of growth left to materialize between the two countries. A substantial interaction between the business communities of both countries is needed in order for bilateral trade to flourish further.
