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Russia may partner OVL in oil projects

September 30, 2005 16:54 IST

Russia is keen on ONGC Videsh Ltd partnering with its state-owned firms for oil and gas exploration in its territory and third countries, even as Moscow termed New Delhi as its natural ally.

"We have excellent relationship (with India). We have cooperation not only in oil and gas sector but also in other spheres like defence...we are natural allies," Russia's Minister of Industry and Energy Viktor Borisovich Khristenko said on Friday.

"(These are) excellent conditions for developing partnerships," said Khristenko, who arrived here to witness along with Indian Petroleum Minister Mani Shankar Aiyar the maiden oil and gas production from Sakhalin-I fields.

He said participation of OVL, the overseas arm of Oil and Natural Gas Corp, in Sakhalin-I project has been an exceptional experience for the Russians and they welcomed more such ventures.

OVL has 20 per cent stake in the ExxonMobil-operated Sakhalin-I project, which would start producing about 23,000 barrels of oil per day from October 1 and ramp up the production to 250,000 bpd by 2006-end.

"There are enormous opportunities...in the far east (Russia) and in third countries. A number of projects involving OVL are being discussed," he said, but declined to give details of the projects.

Aiyar is scheduled to hold talks with Khristenko on Saturday for participation of OVL in super giant fields like Shtokman and Prirazlomneye, besides involvement of Indian oil and gas firms in various pipeline projects.

OVL is eyeing oil fields in East Siberia, which is estimated to hold some 20 billion barrels of reserves, and Russian continental shelf, that may contain oil and gas in 4 million sq km of its total area of 6.5 million sq km (largest in the world).

Also on Aiyar's agenda would be OVL's interest in a stake in Sibneft, Russia's fifth-largest oil producer, which is being bought over by a Russian gas monopoly Gazprom for $12-billion. OVL's investment radar is also scanning a smaller firm, Severnaya Neft, officials said.

Aiyar would also push for OVL getting a stake in 3.2 trillion cubic meters gas field Shtokman and Prirazlomnoye oilfield, which holds recoverable oil reserves of more than 83 million tonnes.

Other areas of interest for OVL include exploration blocks in Timan-Pechora area, Sakhalin-3 and 6 projects, Vankor oil field and exploration properties in East Siberia.

Khristenko said Sakhalin-3 and blocks in Timan-Pechora would be put on auction after the Russian government passes a new Sub-Soil Law. He, however, did not give a time-frame for enactment of such a law which would lay down the rules for auctions, tax regime and exploitation procedure.
By Ammar Zaidi in Sakhalin
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