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. Last Updated: 07/27/2016

India Plans 'Large' Investment in Russian Oil

NEW DELHI, India -- India is planning large investments in Russia's energy sector as a part of its strategy to secure foreign petroleum assets to meet the oil demand of its rapidly growing economy, the country's foreign minister said.

India's Oil & Natural Gas Corp, or ONGC, already owns a 20 percent stake in Russia's Sakhalin-1 project and has said in the past that it was eyeing a stake in Sakhalin-3 and is keen to get a slice of Yukos' oil assets.

"Negotiations are on to significantly expand India's investment in Russia's energy sector," Foreign Minister Natwar Singh told delegates at the Petrotech oil and gas conference Wednesday.

He did not give details.

India, which produces only 30 percent of the oil it needs, is seeking stakes in foreign projects to meet the needs of its economy, which is expected to grow between 7 and 8 percent per year for the next two decades.

"To fuel this growth, India's energy consumption, at a conservative estimate, will increase 5 percent per annum up to 2010 or 2011," Singh said.

By then, India would emerge as the world's fourth-largest consumer of energy after the United States, China and Japan, he said.

India, former Cold War ally of Russia, took Moscow's help in exploring oil and building refineries after independence from Britain in 1947.

Earlier this week, India said it might merge its 14 oil companies, including ONGC, to boost overseas exploration and catch up with China in securing energy supplies.

ONGC has reportedly been offered 20 percent of Yuganskneftegaz, Yukos' main production unit, which Moscow sold last month to cover part of a $20-billion-plus tax debt. Yugansk was sold for $9 billion to a shell company later acquired by state-owned Rosneft, which is now racing to refinance the short-term loans it took out for the purchase.

Rosneft is looking to borrow up to $6 billion from China's CNPC secured by future crude deliveries.

(Reuters, MT)