India to weigh Russia’s offer on Sakhalin-1 oil project

Petroleum minister says India has “healthy dialogue” with Russia following decree to seize foreign stake in project.

Hardeep Singh Puri in office, with flag, table and desk behind him
Indian minister of Petroleum and Natural Gas Hardeep Singh Puri poses for a picture after he launches an auction of offshore oil and gas blocks in Houston, Texas, US, October 10, 2022. REUTERS/Gary McWilliams

India maintains a “healthy dialogue” with Russia and will look at what is offered following an announced ownership revamp to the Sakhalin-1 oil and gas project, Petroleum Minister Hardeep Singh Puri has told the Reuters news agency.

Russia last week issued a decree allowing it to seize Exxon Mobil’s 30 percent stake and gave a Russian state-run company the authority to decide whether foreign shareholders, including India’s ONGC Videsh, can retain their participation in the project.

“We’ll look at what is the state of play and what’s on offer,” Puri told Reuters on Monday following meetings with United States oil executives in Houston, Texas.

India is “actively monitoring” Saudi Arabia’s Asia premium over oil prices after OPEC+ last week agreed to cut oil production by 2 million barrels per day beginning next month, Puri said.

“At the end of the day, consumers start playing a role when situations like this evolve,” he said referring to the global energy balance and the “unintended consequences” of the OPEC+ decision. Too-high oil prices could exacerbate inflation and tip the global economy into recession, reducing oil demand, he added.

On the proposed European Union price cap on Russian oil purchases, Puri suggested it is not yet firm. “If the Europeans come with a plan, let’s see how it evolves,” he said.

Puri this week met US Energy Secretary Jennifer Granholm and Energy Security Adviser Amos Hochstein in Washington, DC, where they discussed collaborations on biofuels and clean energy in addition to energy security.

“At no stage have we ever been told not to buy Russian oil,” Puri said, referring to talks with officials on global energy supplies.

In Houston, he met executives from Exxon Mobil, oilfield service provider Baker Hughes and liquefied natural gas producers after launching a bidding round for offshore oil and gas exploration areas.

India is interested in the US companies’ technical expertise in offshore production, ethanol and sulfur recovery in oil refineries, Puri added.

“For getting to green energy, you have to survive the present,” he said.

There are also discussions under way with Guyana, Brazil and Colombia for joint investment and extra supplies of crude for Indian refiners, he said.

Source: Reuters