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Home / News / Today's Headlines / India's ONGC to Join Sakhalin-3 Project

06.11.2008

India's ONGC to Join Sakhalin-3 Project

Russian Prime Minister Vladimir Putin and Indian oil minister Murli Deora discussed on Wednesday a role for India in the Sakhalin-3 project and a possible joint venture between their main energy firms, Indian officials said.

The two leaders were set to consider forming a joint venture between Rosneft and ONGC Videsh, the overseas arm of state-run Oil and Natural Gas Corp, the Indian government said in a statement early in the day.

  ONGC is interested in exploration and development projects with Rosneft in eastern Siberia, seeking to expand its presence in Russia beyond its stake in the Sakhalin-1 project.

Russian officials, however, did not confirm that discussions went beyond Sakhalin-1 to discuss the Sakhalin-3, another huge oil and gas development on the Pacific island of the same name.

"The economic and trade relations between Russia and India were discussed during the talks, with special emphasis on our energy dialogue," Putin's spokesman Dmitry Peskov said, Interfax news agency reported.

"The two sides exchanged ideas about the participation of our Indian partners in the Sakhalin-1 project," Peskov was quoted as saying.

IMPERIAL DEAL

In late August, ONGC agreed to a takeover of Imperial Energy , a mid-sized London-listed Russian oil producer for $2.6 billion.

Last week, Russia's antitrust watchdog said it needed more time to review ONGC's bid as it believed the deal could limit competition.

Industry officials said the Imperial deal would be high on Deora's agenda during his visit to Moscow, but ONGC Chairman R.S. Sharma and a senior oil ministry official denied that last month.

The delegation that came over from India included Sharma, Oil Secretary R.S. Pandey, ONGC's Managing Director R.S. Butola.

It was not yet known if Putin and Deora discussed ONGC's takeover of Imperial Energy, but industry insiders say the presence of ONGC Videsh, which is handling the acquisition, made it clear that Imperial was on the agenda.

Sources close to the deal say an agreement should be reached before the end of this year.

Russian President Dmitry Medvedev is expected to go to New Delhi on Dec. 3 to clinch the deal, trade sources in Moscow said, but a Kremlin spokesman could not confirm the trip.

In August, Deora said the Russian president was "very supportive" of ONGC's bid.

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