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India May Increase Investment in Russian Oil and Gas Fields If West Leaves Market, Oil Minister Says

© Photo : Indian PM Office / Modi Meets Putin in DelhiModi Putin Meet
Modi Putin Meet - Sputnik International, 1920, 21.03.2022
Energy firms such as British Petroleum, Shell, Centrica, and others have announced their withdrawal from Russian oil and gas fields in response to Moscow's military action in Ukraine. Energy has become an important pillar of India's special and privileged relationship with Russia during the Narendra Modi era.
India has brushed aside US warnings against energy ties with Russia amid the ongoing military operation in Ukraine.
Indian Petroleum and Natural Gas Minister Hardeep Singh Puri has categorically stated that if Western energy firms vacate the Russian market, New Delhi will not hesitate to take advantage of the opportunity.

"We are in discussions with the highest level of those Western companies. I have no doubt that if those companies were to exit finally as some of these companies are saying, that they do not have the intention to invest further there [Russia], but if there are economic opportunities that become available, we will certainly look at all those possibilities", Puri said.

The oil minister, who spoke with Russia's Deputy Prime Minister Alexander Novak on 12 March on energy matters, replied to parliamentarians wondering if there would be diplomatic and economic ramifications if India increased energy investments in Russia.
New Delhi sees rising opportunities in Russia at discounted rates as Shell, British Petroleum, ExxonMobil, and several others responded to Moscow's special military operation in Ukraine by exiting their investments worth around $30 billion from Russian energy fields.
India's public sector units — ONGC Videsh Ltd, Indian Oil Ltd, Bharat Petro Resources Ltd, Oil India Ltd -- have invested over $16 billion in oil and gas fields such as Sakhalin-1, Imperial Energy, Vankorneft, TaasYuryakh, and License-61 since the early 2000s.
Russian entities, including Rosneft, own a majority stake in the Indian refiner Nayara Energy.
The Indian minister said that some of those Indian investments are very profitable. Using the Sakhalin-1 project as an example, the minister said that the Indian firm ONGC Videsh Ltd has earned over $3.7 billion with a 20% investment of $337 million two decades ago.
ExxonMobil operates the Sakhalin-1 project on behalf of an international consortium of Japanese, Indian, and Russian companies.
"In response to recent events, we are beginning the process to discontinue operations and developing steps to exit the Sakhalin-1 venture", the Texas-based ExxonMobil said on 1 March.
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The BJP politician, however, underlined that the media reports about Western firms already withdrawing their investments from Russian energy fields are not authentic.

"When we look at some of these reports and discuss with these Western entities, the facts on the ground, I think, vary. There is a nuanced approach. Some intend to exit; others say they will not make a fresh investment", Puri added.

The minister assured the parliamentarian that there would be no adverse impact on hydrocarbon energy agreements with Russia.

Impact on US-Indian Relations Over Rupee-Ruble Trade With Russia

India's top refiner, Indian Oil, signed an agreement to purchase 3 million barrels of crude oil from Russia this month.
Although India buying Russian oil wouldn't violate US sanctions against Moscow, the Indian government has planned payment in national currencies to continue trade in other commodities. The US has imposed sanctions on several Russian financial institutions.
When asked if rupee-ruble transactions will harm New Delhi's relationship with Washington, Minister Puri responded to parliamentarians by saying that India and the US have a robust bilateral energy partnership that will continue to grow.

"In the financial year 2021, we imported 14 million metric tonnes from the US or 7 percent of our requirement. This will increase up to 16.8 million metric tonnes in the current financial year", he added.

The minister said that energy imports from the US are around $13.5 billion, including $10 billion in crude oil.
"As far as oil imports from Russia are concerned, contrary to what is being played up in the press, these are minuscule", Puri said.
Indian oil and gas public sector undertakings imported approximately less than one percent of its total crude oil imports from Russia in 2021-2022 (April 2021 to January 2022).
On 15 March, when a reporter asked about India's decision to buy discounted Russian oil, White House spokeswoman Jen Psaki said the US message to "any country" is to "think about where you want to stand when the history books are written".
Russian President Vladimir Putin announced a special military operation in the Eastern European country on 24 February at the request of the Donetsk and Lugansk People's Republics.
President Putin stressed that the operation was started to stop the eight-year-long atrocities by Kiev in Donbass, adding that Russia's goal is the demilitarisation and denazification of Ukraine.
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