Rosneft to supply crude to IOC; India & Russia talk BPCL
After getting a foothold in the Indian petroleum market by buying out Essar Oil in 2017, Russia’s stateowned Rosneft on Wednesday signed an agreement with Indian Oil Corporation for providing 2 million tonnes of Urals grade crude oil to the latter.
The oil will be shipped to India this year. Rosneft is also expected to bid for the government-owned Bharat Petroleum Corporation (BPCL).
The Russian major already holds 49 per cent in Nayara Energy, the erstwhile Essar Oil. Nayara owns a 20 million tonne refinery in Vadiar, Gujarat, and has a network of 5,600 petroleum retail outlets across India.
The crude purchase agreement with Indian Oil was signed during a meeting between Union Minister of Petroleum and Natural Gas and Steel Dharmendra Pradhan and Rosneft chairman and chief executive officer Igor Sechin.
The long-term contract is a part of India’s strategy for diversifying the country’s crude oil supplies from non-opec countries. It is also a part of the fiveyear roadmap for bilateral cooperation in the hydrocarbons sector. A pact in this regard was signed during Prime Minister Narendra Modi’s visit to Vladivostok last September, said a press release from the ministry of petroleum and natural gas.
“The addition of Russia as a new source for crude oil imports by India’s largest refiner will go a long way in mitigating the risks arising out of geo-political disruptions. The new arrangement would also usher in price stability and energy security for India, which is witnessing robust growth in demand for petroleum products. It will also open up avenues for other public sector undertaking (PSU) oil refiners to enter into similar term contracts for import of Russian crude oil,” said the release.
Both sides agreed to take forward mutually aligned priorities, including preparing a road map for Indian investments in the Eastern Cluster projects of Russia.
It was noted that the four Indian oil and gas PSUS have already submitted the expression of interest to Rosneft to participate in the project.
In order to negotiate the terms of Indian companies entering Vostok Oil in the shortest time possible, it was agreed to create a working group of representatives of Russian and Indian companies.
During Wednesday’s meeting, both the countries reviewed the ongoing investments between Indian oil & gas PSUS and Rosneft. They called for enhancing energy cooperation further and strengthening hydrocarbons engagement, both on the investment front as well as sourcing natural gas and crude oil. Pradhan said that hydrocarbon is an important pillar of the bilateral strategic partnership. “Indian oil and gas companies value their association with Rosneft, one of the important companies partnering India’s energy security objectives,” he added.
Both sides agreed to take forward mutually-aligned priorities discussed during Pradhan’s visit to Russia in September last year. This includes preparing a roadmap for Indian investments in the Eastern Cluster projects of Russia, especially in the Arctic.
Pradhan said Indian companies, especially Engineers India, have considerable expertise in providing engineering consultancy as well as executing mega projects across the hydrocarbons value chain.
Sechin indicated his readiness to intensify cooperation to strengthen India’s energy security and work jointly with Indian oil and gas companies.
The crude oil, being sourced under the contract, will be loaded in Suezmax vessels at the Novorossiysk port of Russia and come to India, bypassing the Straits of Hormuz.