Their eyes set on a greater role for Indian companies in exploiting Russia’s vast hydrocarbon reserves, India and Russia have decided to deepen energy cooperation between the two sides including setting up a joint group to work out the possibility of a gas pipeline.
The legal issues around India’s nuclear liability law have stood in the way of clearing the decks for the two new 1000mw power units at Kudankulam in Tamil Nadu.
But officials say this was only one component of the energy security that New Delhi was looking for in Russia to power India’s factories and industrial hubs over the next several decades.
The nuclear deal could not be sealed during Singh’s visit due to provisions in the liability law that foreign nuclear supplies worry, would leave them exposed to unlimited liability in the eventuality of a nuclear accident.
At their interactions with the Russian leadership, the Indian side echoed ONGC-Videsh Limited’s (OVL) interest in participating along with Russian companies in exploration for hydrocarbons in the Arctic region.
Already, OVL has invested $ 5.1 billion in exploration projects in Russia, its largest investment in any single country.
Ajai Malhotra, Indian Ambassador to Russia said Indian investment in Sakhalin 1 (a consortium that develops oil and gas fields in far east Russia) has been a grand success.
“The investment we have done in Tomsk (one of the oldest towns in Siberia) is on the way to being successful because the government has dropped the 24% mineral extraction tax imposed earlier for western Siberia…We have identified a technology partner who will help us exploit that,” he said.
Malhotra said they were looking for more opportunities. “We are looking at Novatec… cooperation with Rosneft in terms of investment…. I think you will hear many positive indicators in the coming months, if not weeks,” the envoy said.
Foreign secretary Sujatha Singh said the gas pipeline project – that will be examined by a joint working group – was a “visionary project”. Officials suggest Russia had mooted the project, partly over worries that Shale gas from the United States could chip away its market for gas in Europe.