Russia, India to jointly drill for Arctic oil through Rosneft, ONGC

India’s Oil and Natural Gas Corp (ONGC) will drill for oil in the Russian Arctic region in association with Rosneft, the biggest oil company in Russia.

The companies will co-operate in subsurface surveys, exploration and appraisal activities and hydrocarbons production in Russia’s offshore Arctic, ONGC said in a statement.

India has been hungry for hydrocarbons to feed its rapidly expanding energy demand. The country is dependent on foreign nations for meeting nearly 80% of its oil needs. Oil and coal are the biggest sources of energy for India.

ONGC has had a long presence in Russia and owns oil and gas blocks in the country, while India and Russia have traditionally had a strategic alliance with each other.

The cooperation agreement was signed in the presence of Russian president Vladimir Putin, ONGC said. More partners may join later, ONGC said.

“The parties will jointly consider forming a consortium led by Rosneft and involving other partners,” ONGC said.

The Arctic is an ecologically sensitive region and drilling in the area has faced tough opposition in countries like Canada and the United States.

At present, ONGC Videsh has activities in 33 projects spread across 16 countries. ONGC Videsh and Rosneft are partners in the Sakhalin-I oil and gas project in the Russian Federation.

ONGC is India’s largest government-run corporation and produces about 70% of India’s crude oil and natural gas. The corporation is the biggest public sector commercial organization in India with current market capitalization of about USD 60 billion. The Indian government holds a 68.94% stake in ONGC.