OVL Ties Up With Russia's Resnoft for Hydrocarbon Opportunities
OVL Ties Up With Russia's Resnoft for Hydrocarbon Opportunities
ONGC Videsh Limited (OVL) the global arm of India's biggest state-owned explorer ONGC has just signed a deal with Russian oil and gas production company Rosneft to look for hydrocarbon opportunities in offshore Arctic.
As per the statement of Rosneft, the 2 companies have signed an MoU for cooperation in subsurface surveys, explorations and appraisals as well as hydrocarbon productions in offshore Arctic. The two companies are also considering a consortium led by Rosneft in partnership with other countries.
This MoU was signed between the ONGC MD and Chairperson Mr. D.K. Sarraf and the Rosneft Chairperson and President Igor Sechin at the ongoing Saint-Petersburg International Economic Forum to be held in Russia.
This was the third venture of OVL in Russia since the year 2001 when it acquired a stake in the Sakhalin-1 oilfield in the sedimentary basin of the country. 3 blocks were acquired in the field and of these the first started production in 2005. The third will commence this year. OVL's second venture in Russia centered on the purchase of majority stake in Imperial Energy Corporation Plc. OVL purchased this in the year 2009 for $2.1 billion and its operations spread across the Tomsk region in Russia's western Siberia.
Mr Sechin has visited India during the month of March. Rosneft had offered OVL a stake in 9 offshore oil and gas blocks in the Barents Sea and 1 in Black Sea. The Russian firm is also looking to become a supplier for crude oil to Indian refineries.
Moscow is currently negotiating oil and natural gas deals following the imposition of sanctions by US and censure from many EU nations over the Ukraine crisis. But with elections in Ukraine underway, one hopes that mutual differences between the 2 camps are resolved and the election results are mutually acceptable. This will pave the way for smoother relations between Russia and the West.
India currently does not have a concrete contract to import crude oil from Russia. It also obtains small volumes for some time from the Sakhalin-1 project. Of the blocks offered by Russia in the Barents Sea, OVL chose participation in 2 while decision on 2 others will be made available in June.
Rosneft had also offered ONGC a stake in the Magadan 2 and 3 exploration blocks in the northern part of Sea of Okhotsk in eastern Russia. OVL is currently studying this proposal. Rosneft also has a stake in a project operated by Exxon Mobil. OVL is looking to expand in the field of Arctic projects in Siberia and Far East Russia. It acquired Imperial Energy which has fields in Siberia for a sum of $2.1 billion.
While nations across the world are collaborating in the field of oil and natural gas, they should also consider the advantages of switching to renewable energy sources. This can have vast amount of benefits for the nations. World leaders need to rethink their nation's energy utilisation strategies. Timely intervention will yield big profits and a bright future for the nations that think ahead. While fossil fuels are undoubtedly a source of energy to meet many commercial needs, States must arm themselves with renewable energy facilities as well so that they can be prepared for a world where oil reserves are going to dwindle one day. Rather than engaging in a battle for resources, they should turn to strategic collaborations and partnerships which can prove valuable in more ways than just money.
