As part of India’s strategy for diversifying the country’s crude oil supplies from non-OPEC countries, India will now import crude oil from Russia for the year 2020. Indian Oil Corporation Limited has signed a contract with Russia’s Rosneft for importing 2 million metric tonnes of Urals grade crude oil in a bilateral meeting. According to the Ministry of Petroleum & Natural Gas, the addition of Russia as a new source for crude oil imports by India’s largest refiner will go a long way in mitigating the risks arising out of geopolitical disruptions. The new arrangement is expected to result in price stability, the oil ministry said.
Not just better prices but the agreement will ensure energy security for India as well, said the Ministry of Petroleum & Natural Gas. According to the ministry, India is witnessing robust growth in demand for petroleum products and the recent agreement will also open up the avenues for other PSU oil refiners to enter into similar term contracts for import of Russian crude oil. Four Indian oil and gas Public Sector Undertakings (PSUs) have already submitted the Expression of Interest to Rosneft for importing oil. “In order to negotiate the terms of Indian companies entering Vostok Oil in the shortest time possible, it was agreed to create a working group of representatives of Russian and Indian companies,” said the Ministry of Petroleum & Natural Gas.
Meanwhile, India is one of the biggest oil-importing nations as it largely depends on imports to fulfil its domestic oil requirement. The government has recently notified that the country’s import dependence has increased from 78.3 per cent in FY15 to 83.8 per cent in FY19, contradicting the government’s vision on reducing oil imports.
Apart from investments for crude oil imports, the Indian government and Rosneft discussed further enhancing energy cooperation and strengthening hydrocarbons engagement. According to Dharmendra Pradhan, Minister of Petroleum & Natural Gas and Steel, hydrocarbons are an important pillar of the bilateral Strategic Partnership. He said that Indian companies especially Engineers India Limited have considerable expertise in providing engineering consultancy as well as executing mega projects across the hydrocarbon value chain.
