India nudges Russia to get OPEC to price oil reasonably

India has nudged Russia to use its influence on oil suppliers cartel OPEC to balance the global oil market, ensuring adequate supply with responsible and reasonable price.

Oil Minister Dharmendra Pradhan, on a three-day visit to Moscow, met his Russian counterpart Alexander Valentinovich Novak to review "the entire spectrum of oil and gas cooperation," Pradhan said in a tweet after the meeting.

India, the world's third-biggest oil consumer, has been pressing the Organisation of Petroleum Exporting Countries (OPEC) for responsible pricing of oil and gas, saying the volatility in rates are far detached from market fundamentals and are hurting importing nations.

Russia is collaborating with the OPEC in fixing oil production quota with a view to controlling the prices.

"Discussed with Minister Novak about the price volatility in the global oil market that is hurting the interests of both consuming and producing nations," Pradhan said in another tweet. "Also conveyed our expectation that Russia, as a member of the OPEC Plus, can play an important role in balancing global oil market both in terms of ensuring adequate supply as well as in having a responsible and reasonable price."

India imports over 83 per cent of its crude oil needs. Of the total crude oil imported, about 85 per cent of comes from OPEC nations. Also, 80 per cent of gas imports come from those countries. India believes OPEC has a major role in shaping oil prices and availability, and the current high oil prices dent economic development of many countries as well as threaten already fragile world economic growth.

Pradhan also discussed with Novak interest of Indian firms in investing more in Russian oil and gas fields. He also sought Russian investment in Indian oil and gas exploration and production (E&P), oil refining, petrochemicals and LNG import facilities.

"Minister Novak and I met with over 20 CEOs and senior representatives of Indian and Russian oil & gas companies both in public and private sector," he said. "Discussions recognized that there are still enormous opportunities for investments in oil and gas assets in Russia, and Russian investments in new initiatives launched to transform India into a gas-based economy through CGD, LNG terminals and use of natural gas in transportation, and expanding E&P opportunities and also refining capacities."

CGD is city gas distribution network that retail CNG to automobiles and piped cooking gas to households. Liquefied natural gas (LNG) is super-cooled natural gas that turns into liquid for ease of transportation in ships.

"We agreed to propose concrete recommendations including a roadmap and action plan for cooperation in the oil & gas sector to the Eastern Economic Forum and 20th Annual Bilateral Summit between Hon. Prime Minister Shri @narendramodi and President Putin," Pradhan said in another tweet.

Pradhan had on Thursday met officials of Russian oil firm Rosneft to discuss collaboration between the two nations.

A Rosneft-led consortium had in 2017 bought Essar Oil that operates 20 million tonne refinery at Vadinar and over 5,500 petrol pumps in the country, for USD 12.9 billion. Essar Oil has since been renamed Nayara Energy.

Pradhan is in Moscow ahead of Prime Minister Narendra Modi's visit to Russia. Modi will be the chief guest at this year's Eastern Economic Forum in Vladivostok between September 4 and 6.

Modi would also meet the Russian President for the annual summit.

Energy-hungry India is keen on sourcing one million barrels per day of oil and oil-equivalent gas from Russia and had identified Sakhalin-3 in the Far East, Vankor in East Siberia, and Terbs and Titov oilfields in Timan Pechora region as fields for potential collaboration. But, it has so far been unsuccessful in its attempts.

OVL already has 20 per cent stake in Sakhalin-1 oil and gas field in Far East Russia, and in 2009 acquired Imperial Energy, which has fields in Siberia for USD 2.1 billion.

Russia is wooing Indian investments in its Far East region ahead of Modi's Vladivostok visit to balance China's expanding presence in the resource-rich region.