Page 12 - The Indian EYE 070122

OPINION JULY 01, 2022 | The Indian Eye 12

the direct purchase of oil and gas, sakhapatnam is around 9,256 km.
is through ONGC Videsh Limited’s At an average speed of 13 knots, it
(OVL) direct investments in Russian would take approximately 16 days for
energy projects. these oil shipments to reach all major
Apart from Sakhalin-1, OVL Indian refineries on its eastern coast.
holds 100 per cent stake in Russia’s This is a significant reduction in trav-
Imperial Energy Corporation and 26 el time as compared to Russian oil
per cent stake in the Vankorneft field. coming to India’s western coast from
Also, 23.9 per cent stake in Russia’s its Baltic Sea ports, for which average
Vankorneft field and 29.9 per stake transit time is 23 days.
in the Taas-Yuryakh field, are jointly If we compare India’s oil ship-
held by the consortium of Oil India ments coming from US Gulf Coast
Limited, Indian Oil Corporation and to Mumbai port, the approximate
Bharat PetroResource Limited. transit time is 31 days and this further
In the aftermath of the Ukraine increases to 35–40 days, if the ship-
crisis, Russia’s offer to supply India ments need to reach Indian refiner-
with cheaper crude oil (US$ 35 lesser ies on the country’s eastern ports.
than the international market price), The only limitations that currently
was criticized by the West. Indian hinder enhancing India–Russia oil
companies though significantly in- trade relate to payments, availability
creased their volumes of oil imports of shipping vessels and cargo insur-
from Russia. India’s total import of could enhance geopolitical dispari- ment is the fact that it would be dif- ances. Western sanctions on shipping
Russian oil despite buying addition- ties, owning to the presence of Japan ficult for China to stop Russian oil companies and insurance providers
al volumes in March 2022, remained and India as the other two partners in shipments to India, given the China– are hindering the transportation of
less than 1 per cent of its total oil im- these projects. But, if India becomes Russia strategic partnership. Still, if Russian crude to its required desti-
port. These figures increased to 18 successful in increasing its stakes in ever the situation arises, India may nations. If India and Russia develop
per cent in May, 2022 as per a report Sakhalin, it would not only benefit also use similar leverage against Chi- credible mechanisms to bypass West-
published by CREA. Indian oil refineries with high-grade na on its energy shipments passing ern economic sanctions or can find
The Western exit from Russian sweet crude (especially Sokol grade through the Malacca Strait. suitable alternatives complying with
oil projects could become a big op- form Sakhalin-1) to sustain domes- international norms, there remains
portunity for Indian oil companies tic needs, but Indian oil companies SHIPPING FACTOR AND immense potential for both the coun-
to directly invest in Russian energy could also process and can further DISTANCE ANALYSIS tries to cooperate in Sakhalin.
projects to secure the country’s long- sell Sakhalin crude and its derivatives India has four major oil refin-
term energy needs. ExxonMobil’s to South East Asian, South Asian eries located on its eastern coast. CONCLUSION
decision to sell its 30 per cent stake and even European markets. These include Haldia Refinery (West India in 2019 issued a US$ 1
from Sakhalin-1 needs to be careful- An increase in energy invest- Bengal), Paradip Refinery (Odis- billion line of credit for the develop-
ly thought through, and India’s OVL ments in the Russian Far East would ha), Manali Refinery (Chennai) and ment of the Russian Far East region.
could consider increasing its stakes further enhance India–Russia naval Visakhapatnam Refinery (Andhra The government’s vision inclines well
in Sakhalin-1. Similarly, OVL or a cooperation and would significant- Pradesh). The shipping distance be- with the current emerging opportu-
joint consortium of companies led by ly strengthen Indian naval presence tween Russia’s De-Kastri oil export nities in Sakhalin. The government is
OVL, could consider buying Shell’s in the Indo-Pacific. Indian oil ship- terminal (Sakhalin-1) and Chennai in talks with state-run oil companies
27.5 per cent stake that it intends to ments coming from the Russian Far Port is 9,626 km. It would take ap- to consider increasing their stakes in
sell in Russia’s Sakhalin-2 project. East would also be free from piracy proximately 16 days and 15 hours Russian energy projects. Though the
OVL already maintains the techni- risks which remains a threat near for a large oil cargo ship to cover Middle East remains India’s most
cal expertise required for drilling the Horn of Africa. One may argue this distance, running at an average viable choice for energy imports,
in these harsh terrains. Therefore, that in an adverse case scenario, Chi- speed of 13 knots. Similarly, the aver- emerging geopolitics and shifting
such investments would significantly na may put a blockade to Indian oil age distance between Korsakov port traditional alliances compels India to
strengthen and diversify India’s en- shipments coming from the Russian (Sakhalin-2) and the Indian ports of diversify its partners. Russia, with its
ergy supply chains and reduce the Far East. But a valid counter argu- Haldia, Chennai, Paradip and Vi- abundant energy resources, coupled
country’s dependency on Middle with the exit of Western oil compa-
East countries for oil imports. nies from its energy projects, offers
tremendous opportunity for India.
STRATEGIC CALCULUS
Both Sakhalin-1 and Sakhalin-2 Bipandeep Sharma is a Research
offer tremendous opportunities for Analyst at the Manohar Parrikar
Institute for Defense Studies and
India. Though there looms the cur- Analyses, New Delhi
rent fear of Western economic sanc-
tions and other technical shipping Views expressed are of the author and
hindrances, India needs to pragmat- do not necessarily reflect the views of
ically think through the long-term the Manohar Parrikar IDSA or of the
energy benefits from this region. Government of India.
Western exits from Sakhalin ener- This is the abridged version of the In-
gy projects may negatively impact troduction of the book which appeared
Russia economically, but it would first in the Comment section of the
simultaneously create investment website (www.idsa.in) of Manohar Par-
voids, thereby giving a free hand to Narendra Modi addressing at the plenary session of 5th Eastern Economic Forum (EEF) in rikar Institute for Defense Studies and
China to make long-term energy in- Vladivostok, Russia in September 2019 (ANI) Analyses, New Delhi on June 21, 2022
vestments. China’s stakes in Sakhalin

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