India faces stiff competition from China in the race for Russian oil and gas resources, admitted Russia’s top oil executive.
To a direct question from N. Ram, Editor-in-Chief of The Hindu, when India could expect an answer to its request for joining Russia’s state-run gas monopoly Gazprom and oil major Rosneft in the Sakhalin-3 oil and gas project, Gazprom chief Alexey Miller said: “If we speak of India, we should also speak of China. They are both major players in the energy market and have entered into serious competition for resources.”
Mr. Miller said Chinese as well as Indian companies were offering about $10 per barrel, which he described as a “strategic premium in the race for resources.”
He said India’s participation in Sakhalin-3 was still in the early stages of discussion, even though Gazprom has had “enormous interest” in India’s vast energy market in the medium and long-term perspective, and already has some projects in India.
Rosneft chief executive Sergei Bogdanchikov said his company was willing to consider India’s bid to join the Sakhalin-3 project - when it comes.
“We have been working on the Venin block of Sakhalin-3 jointly with our Chinese partner Sinopec for three years now and are both ready to consider India’s application, but we have not seen active interest toward the project [Sakhalin-3] on the part of ONGC-Videsh so far,” Mr. Bogdanchikov said.
But India is known to have repeatedly stated its interest in Sakhalin-3 to Russia’s top leaders.
Mr. Miller and Mr. Bogdanchikov met members of the Valdai International Discussion Club on Saturday.
The Rosneft chief heartily praised Sakhalin-1 and the contribution of India, which was Rosneft’s partner in the project. He said oil production on the field started in 2005 and by 2008 the participants recovered their initial investments in the project.
“It is the only major field in the world which repaid outlays in such a short time,” Mr. Bogdanchikov said, adding that India deserved praise for this along with other partners in the project.
Sakhalin-1 is operated by Exxon Neftegaz, in which U.S. Exxon Mobil has 30 per cent, Japan’s SODECO has another 30 per cent, and Rosneft and OVL have 20 per cent each.