Page 10 - The Indian EYE 070122

OPINION JULY 01, 2022 | The Indian Eye 10

India–Russia Energy Cooperation

in Russian Far East

Russia, therefore, needs reliable long-term partners to develop its Far Eastern regions and

sustain its economy. Oil and Gas are sectors whose strength is vital for reviving the Russian

economy, post the Ukraine crisis

BIPANDEEP SHARMA Mitsubishi Corp. (Japan). Shell, needs, uncertainty remains as to the and requires special technical exper-
which holds 27.5 per cent stake in future prospects of this cooperation. tise and engineering skills for explo-
he Ukraine crisis has led many Sakhalin-2, has announced plans to Sakhalin-1 and Sakhalin-2 are ration. Moreover, the development
Western oil and gas companies exit this energy consortium. There Russia’s most important integrated and operational costs of these proj-
Tto terminate their joint ener- were also reports that Japanese com- oil and gas development projects ects is much higher.
gy projects with Russia in the Arctic. panies, Mitsui & Co. and Mitsubishi that operate in one of the world’s Russia, therefore, needs reliable
This has been due to the fear of West- Corp., which hold 12.5 per cent and harshest climatic conditions. The long-term partners to develop its Far
ern economic sanctions as well as to 10 per cent stakes in Sakhalin-2 re- Sakhalin-1 is estimated to hold ap- Eastern regions and sustain its econ-
mark opposition against Russia for its spectively, were also under strong proximately 2.3 billion barrels of oil omy. Oil and Gas are sectors whose
military operation in Ukraine. Com- Western pressure to terminate their and 17.1 trillion cubic feet of gas re- strength is vital for reviving the Rus-
panies like BP, Equinor, ExxonMo- partnership with Russia. Though Ja- serves. Sakhalin 2 accounts for 4 per sian economy, post the Ukraine cri-
bil and Shell are some of the major pan has so far resisted this pressure cent of the world’s total LNG supply. sis. If European and Western coun-
energy giants that are in the process owning to the country’s dire energy The region is prone to earthquakes tries become successful in reducing
of finding suitable exits from Russian their oil and gas dependency on
energy projects. Russia (which they intend to do so in
Sakhalin-1, which is an inter- near future), the most viable option
national consortium of oil and gas for Russia is to tap energy markets
development companies in the Rus- in East, South East and South Asian
sian Far East, has started witnessing countries. Sakhalin-1 and Sakha-
similar trends. The US energy giant, lin-2, therefore, can become the most
ExxonMobil, which owned 30 per promising projects for supplying
cent stake in Sakhalin-1, has already Russian oil and gas to these markets.
stopped its operations and is expect-
ed to formally exit from this joint INDIA–RUSSIA ENERGY
venture. The other entities in Sakha- EQUATION
lin-1 are Sakhalin Oil & Gas Devel- Oil and Gas trade between India
opment Co. Ltd. (Japan), ONGC and Russia remains significantly low,
Videsh Ltd. (India) and Sakhalin- despite Russia being the world’s third
morneftegas-Shelf and RN-Astra largest producer and India being the
(Russia). These companies hold 30 third largest consumer. The most
per cent, 20 per cent, 11.5 per cent obvious reason for this pertains to
and 8.5 per cent stakes respectively. the shipping distance, cargo delivery
Similarly, Sakhalin-2 is an in- time and cost escalation as a result of
ternational energy development long geographical distances between
consortium of Gazprom (Russia), Prime Minister Narendra Modi with Russian President Vladimir Putin before a meeting at the two countries. India’s energy en-
Shell (US-based subsidiary of Royal Hyderabad House, in New Delhi at the 21st annual India-Russia summit. in December 2021 (ANI) gagements with Russia, other than
Dutch), Mitsui & Co. (Japan) and Continued at next page... >>

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