India, Russia agree to cooperate in oil, gas sector

India and Russia have agreed on a five-year roadmap to step up cooperation in the hydrocarbon sector, including investment, not only in exploration and production in each other's oil and gas fields but also in downstream projects.

A meeting between Prime Minister Narendra Modi and Russian President Vladimir Putin at Vladivostok was followed by the signing of altogether 14 pacts, including four on cooperation in the energy sector, five in the economic sector, two in the infrastructure sector and another for cooperation in the production of spare parts for Russian or Soviet military equipment in India.

Modi arrived in Vladivostok early on Wednesday. He and Putin later travelled by ship to the Zvezda Shipyard in Bolshoy Kamen. They had a one-on-one meeting on the ship itself and later they led the respective delegations from India and Russia in the formal bilateral dialogue.

The two leaders later witnessed an exchange of a “Memorandum of Intent” on development of a new shipping lane between the Port of Chennai in India and the Port of Vladivostok in Russia. They noted that India-Russia trade grew by 17% to reach $11 billion. To achieve the annual trade target of $30 billion, they agreed to more actively engage the impressive resource and human resources potential of India and Russia, enhance industrial cooperation, create new technologies and investment partnership, especially in advanced high-tech areas and find new avenues and forms of cooperation.

The four pacts in the energy sector included a five-year roadmap for expansion of cooperation in the oil and gas sector. “Indian partners hold 20% in Sakhalin 1 project. Indian energy concerns are also invited to participate in other promising projects, such as Far Eastern LNG and Arctic LNG 2,” Putin said, as he and Modi made statements before media persons after bilateral talks.

Modi said he and Putin agreed on cooperation between Indian and Russian companies in exploration of hydrocarbon in the Arctic.

Foreign Secretary Vijay Gokhale later said that the roadmap, which was agreed upon, and well as the other pacts in the energy sectors was “a major breakthrough” in efforts to expand India-Russia bilateral relations. He said that energy was going to be “an emerging pillar” in India-Russia relations, which so far was focussed mainly on defence and nuclear energy cooperation.

New Delhi moved to step up India-Russia energy cooperation at a time when it had to drastically cut down oil import from Iran in the wake of renewed US sanctions on the Islamic Republic in West Asia. Modi last month told American President Donald Trump during a meeting at Biarritz in France that India would increase its energy imports from the US.

Gokhale, however, said that the move to step up India-Russia energy cooperation had nothing to do with the issues involved with New Delhi's oil import from Iran. He said that Russia was an attractive source for India, which was trying to diversify its sources of energy in view of the growing demand.

The Novatek JSC of Russia inked a Memorandum of Understanding (MoU) with the Petronet LNG Limited of India for the supply of Liquefied Natural Gas (LNG) from Russia to India. The Coal India Limited and Far East Investment and Export Agency of Russia signed another MoU to cooperate in coking coal mining projects in the Far East of Russia. Another inter-governmental MoU was signed on use of natural gas for transportation.