The two countries have developed a relationship amid the geopolitical storm. India’s investment in Russian hydrocarbons is a win-win situation, providing India with energy security and giving Russia a stable market, promoting technology transfer.
Russia and India are at a pivotal point in the geopolitical tremors that have arisen since the beginning of the conflict in Ukraine, and they are showing their increasing connections as a sign of diplomatic strength.
Relationships between Moscow and New Delhi were initially based on defense cooperation, but more recently, they have expanded to include a profitable energy partnership. India’s investments in Russian gas and oil have demonstrated the strength of these two countries’ connections.
The Finance Committee of the Iraqi Parliament stated that they are calling to ditch the US dollar for oil trade.
Influential and influential, Ivan Timofeev, a Russian foreign policy expert, advocates for autonomous financial mechanisms. In the face of global complexity, the energy sector has emerged as the pivot, securing the parties’ cooperative future.
A commercial turnover of over $50 billion was recorded in 2023 between Russia and India, demonstrating remarkable endurance in the face of increasing Western sanctions. Russia’s income recovery in the face of a changing global energy landscape has strengthened its relationship with India, demonstrating its shared commitment to overcoming obstacles and realizing common economic goals.
The Valdai Discussion Club in Russia and the Vivekananda International Foundation in India organized a bilateral conference in New Delhi last month, which highlighted the importance of oil and gas in these two countries’ relationship.
India’s calculated moves into Russia’s oil and gas fields show significant investments and stimulating bilateral relations; their mutually beneficial partnership is well-positioned for success in the upstream, midstream, and downstream energy industry segments, demonstrating their ability to work together and their common economic goals.
At the beginning of this upstream endeavor, Imperial Energy Corporation, a UK-based company that operated in Russia, was purchased for $2.1 billion by India’s Oil and Natural Gas Corporation Videsh (OVL), starting a transformational journey. This historic purchase paved the way for India’s upstream operations on Russian territory and provided access to Siberia’s oil reserves. OVL owns a 26 percent interest in the Vankor cluster, which produces 7.31 million metric tons of oil in the northeastern region of West Siberia, which consists of the Suzunskoye, Tagulskoye, and Lodochnoye fields. Additionally, OVL owns a 20% share in the Russian Far East’s Sakhalin-1 oil and gas field.
Holding a 23.9% share in the project with an investment of $2.02 billion is a consortium made up of Indian Oil Corporation (IOC), Oil India Ltd (OIL), and Bharat PetroResources Ltd, a subsidiary of Bharat Petroleum Corporation Ltd (BPCL). Concurrently, Rosneft holds a 50.1% majority stake and contributes 6.56 million tons of oil production overall.
In addition, the consortium consisting of OIL, IOC, and Bharat PetroResources Ltd (BPRL) has acquired an additional 29.9% stake in the Taas-Yuryakh oilfield located in East Siberia with a major $1.12 billion investment.
On June 19, 2011, ONGC combined its Russian assets with Sistema’s Bashneft and RussNeft in a ground-breaking non-cash agreement. As a result, ONGC gained access to the Trebs & Titov oilfields and acquired a 25% share in the combined company.
The Magadan-2 and Magadan-3 blocks in the northern Okhotsk Sea are thought to contain 2.8 billion metric tons of oil and oil equivalent natural gas. In 2013, Rosneft made OVL an offer to acquire a portion of these blocks. A portion of Rosneft’s Yurubcheno-Tokhomskoye oilfield in eastern Siberia, which is thought to contain 991 million barrels of oil equivalent reserves, was also made available to OVL later in 2014.
India has established a strong position for itself by approving the purchase of LNG from Russia’s Yamal LNG plant. In 2018, GAIL India Limited and Gazprom inked a historic 20-year contract that not only guaranteed a steady supply of 2.5 million tons of LNG per year but also created an unbreakable conduit in the midstream sector.
Their energy partnership was demonstrated by this historic meeting. India marked a significant historical achievement in 2021 when it accepted the first direct LNG supply from Russia as part of its long-term agreement with Gazprom.
India’s accomplishments in downstream operations have resulted in strategic asset acquisition triumphs, demonstrating remarkable foresight and meticulous planning. In 2016, Rosneft pulled off a historic takeover, paying $12.9 billion for an overwhelming 98% holding in India’s Essar Oil. With an astounding yearly capacity of 20 million tons, this ground-breaking project gave rise to Nayara Energy, in which Rosneft owns a 49.13 percent ownership. Nayara Energy is responsible for revitalizing India’s energy landscape by managing the second-largest single-site refinery in Gujarat. With the announcement of intentions to build a state-of-the-art 450 kiloton per year polypropylene plant at the Gujarat refinery in 2021, Nayara’s hopes skyrocketed. This marked the beginning of a diverse range of energy enterprises and another milestone in India’s downstream successes.
These dynamic investments, which cover exploration, production, refining, and distribution, are cornerstones of bilateral cooperation that strengthen India’s energy security, give Russia a stable market, promote technology transfer, and usher in a new age of economic cooperation. Despite the sanctions, Russia has called for further Indian investment in its oil and gas industry, demonstrating its commitment to forging closer economic relations.
The two countries have developed a relationship through geopolitical storms, managing unrest with creative solutions and strong alliances, and serving as models of collaboration in changing multipolar world order. India’s investments in Russian oil and gas fields represent more than just business dealings; they represent a strategic convergence that strengthens relations, fosters technological cooperation, and points the two countries toward a common future of economic growth and energy security.