India’s ONGC May Buy Stake In Rosneft’s Massive Arctic Oil Project

A consortium of Indian energy companies—including state major ONGC—is in early talks with Rosneft for the acquisition of a stake in the Russian state company’s massive Vostok oil project, the Economic Times reported, citing unnamed sources.

“Talks are at a very early stage and the companies are evaluating the project,” one of the sources said.

Meanwhile, Rosneft official reported it has been discussing the project with India’s oil minister Hardeep Singh Puri, who is currently visiting Russia.

The Vostok Oil mega project in Siberia, which includes the Vankor and Payakha clusters, has resources estimated at 44 billion barrels. All those clusters are close to the Northern Sea Route that Rosneft wants to use to ship oil to Europe and Asia.

The project will make up the backbone of Russia’s future oil production, tapping into 5 billion tons of oil to yield 50 million tons by 2024 and 100 million tons by the end of the decade. The development of Vostok Oil over its lifetime is estimated at some $170 billion.

Because of the massive cost of Vostok Oil’s development, Rosneft has been looking for foreign partners. Commodity trading major Trafigura said last December that it had acquired a 10-percent stake in the project, getting access to high-quality crude oil resources from a major new onshore oil-producing region in Siberia’s Taymyr province.

India is one of the more obvious choices when it comes to investment partners. Dependent on oil imports for about 80 percent of its oil consumption and unlikely to swiftly move away from oil to renewable electricity and hydrogen, India has been seeking ways to secure the future supply of the commodity.

Earlier this year, Indian media reported the country was in talks to invest between $2 and $3 billion in Russian oil and gas assets, including in the Arctic.