Nandakumar J
06 April 2006
Among the three pacts on energy cooperation signed between Russia and China during President Vladimir Putin’s Beijing visit last month, Moscow’s willingness to export up to 80 billion cu. m. of natural gas to energy-hungry China has caught the global energy community’s
attention. Russia has immense importance on the global market, with the largest reserve of natural gas and the second largest reserve of oil. The geographical proximity of Russia and remoteness from Persian Gulf energy geopolitics makes it more attractive to the import-dependent, energy-voracious countries in the Asian region.India’s ONGC has a 20% stake in exploration and development of the Sakhalin-I oil and gas field (in Russia), which has total recoverable reserves of 2.3 bn barrels of oil and 17 trillion cu ft of natural gas. ONGC, which was keen to import natural gas from Sakhalin, witnessed the heat of Chinese competition when the Russian oil company, Rosneft, asked it to make a commercially superior bid to the Chinese one to be considered for the export.India needs to take three dimensions into account in considering importing energy from Russia. First, our long-term energy interest in Russia. Second, the factor of Chinese competition in acquiring overseas energy. Finally, China’s energy strategy.Russia will have considerable importance in our energy calculus in the coming years in terms of oil and gas import. Apart from the stake in exploration and development in Sakhalin-I, India is keen to be involved in the Sakhalin-III project, operated by Royal Dutch Shell PLC and also to get a 20% stake in Yuganskneftgaz, a subsidiary of the now-expropriated Yukos oil company.Chinese competition has played a considerable role in our losing some major overseas bids. China National Petro-leum Corporation (CNPC) won deals such as the bidding for Block 18 of Shell in Angola, the Petrokazakhstan deal and the one with Encana in Ecuador. To an extent, the aggressive search for energy by Indian and Chinese firms are encashed by the producing countries. In the case of Sakhalin-I, too, this trend is visible, as Rosneft tries to exploit the competition to get a higher value for gas export.China’s energy strategy envisages outmaneuvering other competitors from the region, especially India and Japan. China’s $6 bn loan offer to Rosneft, its growing arms import from Russia, etc., are part of a larger strategy of cementing energy relations with Russia and keeping other competitors at bay. However, cooperating with China in jointly bidding for energy exports and increasing investments in Siberian and Sakhalin oil assets would certainly be beneficial for India’s longterm energy interest in Russia.
attention. Russia has immense importance on the global market, with the largest reserve of natural gas and the second largest reserve of oil. The geographical proximity of Russia and remoteness from Persian Gulf energy geopolitics makes it more attractive to the import-dependent, energy-voracious countries in the Asian region.India’s ONGC has a 20% stake in exploration and development of the Sakhalin-I oil and gas field (in Russia), which has total recoverable reserves of 2.3 bn barrels of oil and 17 trillion cu ft of natural gas. ONGC, which was keen to import natural gas from Sakhalin, witnessed the heat of Chinese competition when the Russian oil company, Rosneft, asked it to make a commercially superior bid to the Chinese one to be considered for the export.India needs to take three dimensions into account in considering importing energy from Russia. First, our long-term energy interest in Russia. Second, the factor of Chinese competition in acquiring overseas energy. Finally, China’s energy strategy.Russia will have considerable importance in our energy calculus in the coming years in terms of oil and gas import. Apart from the stake in exploration and development in Sakhalin-I, India is keen to be involved in the Sakhalin-III project, operated by Royal Dutch Shell PLC and also to get a 20% stake in Yuganskneftgaz, a subsidiary of the now-expropriated Yukos oil company.Chinese competition has played a considerable role in our losing some major overseas bids. China National Petro-leum Corporation (CNPC) won deals such as the bidding for Block 18 of Shell in Angola, the Petrokazakhstan deal and the one with Encana in Ecuador. To an extent, the aggressive search for energy by Indian and Chinese firms are encashed by the producing countries. In the case of Sakhalin-I, too, this trend is visible, as Rosneft tries to exploit the competition to get a higher value for gas export.China’s energy strategy envisages outmaneuvering other competitors from the region, especially India and Japan. China’s $6 bn loan offer to Rosneft, its growing arms import from Russia, etc., are part of a larger strategy of cementing energy relations with Russia and keeping other competitors at bay. However, cooperating with China in jointly bidding for energy exports and increasing investments in Siberian and Sakhalin oil assets would certainly be beneficial for India’s longterm energy interest in Russia.
