Sunday, Dec 03, 2006
'India keen on stake in Sakhalin-III project' http://www.thehindubusinessline.com/2006/12/03/stories/2006120303460100.htm
Richa Mishra
To strengthen ties with Russia in the field of oil, gas
Share of crude OVL expects its share of Sakhalin crude to touch 50,000 barrels a day once the production from the Sakhalin fields touches its peak.
[FROM RUSSIA WITH LOVE: The Union Petroleum Minister, Mr Murli Deora, receiving a sample of Sakhalin-1 crude from the Russian Ambassador to India, Mr V.I. Trubnikov, in Mangalore on Saturday. - R. Eswarraj]
Mangalore , Dec. 2
After the success of Sakhalin-1 fields in Russia, India is making a case for Indian participation in Sakhalin-III oil fields. Russia is planning to invite bids in future for Sakhalin-III project and once the blocks are put on offer, India will look for opportunities there, the Petroleum Minister, Mr Murli Deora, said.
Mr Deora, who was in Mangalore to receive the first parcel of Sakhalin-1 crude, said he would make a case for Indian firms getting a stake in future Sakhalin projects and strengthening ties with Russia in the field of hydrocarbons.
Speaking to mediapersons, Mr Deora said, "India plans to get more oil and gas from Russia as part of its efforts to diversify sources of energy. Russia is our important friend and we look towards them when we think of our energy needs and security of the country."
Endorsing, Mr Deora's sentiments, Mr Vyacheslav I. Trubnikov, Ambassador of the Russian Federation to India, said "we welcome all kinds of Indian participation in exploration and development of our enormous natural resources, and we are ready to do whatever may be required from us to help ensure India's energy security."
Second cargo soon
ONGC Videsh Ltd (OVL), the overseas arm of Oil and Natural Gas Corporation (ONGC), has 20 per cent stake in Sakhalin-I project. It has shipped 7,00,000 barrels of crude from its share in the project. The second cargo of similar quantity is expected by month-end.
The country imports more than 70 per cent of its crude oil requirement and most of it comes from West Asia. ONGC's subsidiary, Mangalore Refinery and Petrochemicals Ltd (MRPL), will process the Sakhalin crude.
Speaking on the occasion, Mr R.S. Butola, Managing Director, OVL, which is sourcing more than 6 million tonnes of oil and oil equivalent gas per year from 15 countries where it has presence, said that Sakhalin-I project contains an estimated 2.3 billion barrels of oil and 17.1 trillion cubic ft of gas.
ExxonMobil holds 30 per cent in Sakhalin-I, with the remaining equity owned by Russia's Rosneft (20 per cent) and Japan's Sakhalin Oil and Gas Development Co (30 per cent). OVL expects its share of Sakhalin crude to touch 50,000 barrels a day once the production from the Sakhalin fields touches its peak. Currently, OVL's share stands at 33,000 barrels with the production at the fields at 166,000 barrels per day. The production is expected to touch 250,000 barrels per day by early next year.
Rosneft loan repayment
Asked whether OVL's equity stake and sourcing of oil from the fields would remain unaffected or not with Rosneft returning the loan extended to it by the Indian company, Mr Butola said, "it will remain unchanged." Rosneft has repaid the loan extended to it by OVL of about $1.34 billion. OVL's investment in Sakhalin-1 stood at $1.7 billion. The loan was extended to the Russian state-owned firm to fund its 20 per cent equity in Sakhalin-I and was to be paid back in oil. The total development cost of the Sakhalin-1 field is $12.8 billion. OVL on its part proposes to plough back the revenues it earns from sale of Sokol crude oil for development of Sakhalin-1.
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