Russia and India signed Dec. 6 new energy cooperation agreements including a contract for Rosneft to ship almost 15 million barrels of crude to the world's third-largest consumer of oil in 2022, according to government and company statements.
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Both countries also acknowledged the importance of dialogue between consumers and producers to ensure stable energy prices. S&P Global Platts assessed Dated Brent has gained 43% year-to-date to trade around $70/b in early December despite continued concerns over the COVID-19 pandemic.
"The signing of a new oil supply contract confirms the strategic nature of the long-term partnership between Rosneft and Indian Oil," Rosneft CEO Igor Sechin said, according to a company statement.
Russia's largest crude producer said it has agreed to a contract to ship up to 2 million mt, or around 14.66 mil barrels, of crude by the end of 2022. Deliveries will be shipped through the Russian Black Sea port of Novorossiisk, the company said.
Rosneft's owns a 49.13% stake in the Indian company Nayara Energy, which owns the 20 million mt/year Vadinar oil refinery.
The Kremlin also said both countries acknowledged the important role of dialogue between consumers and producers.
"India highlighted the need for responsible and informed market pricing of global energy supplies. Both sides noted the importance of dialog between consumers and producers to stabilize energy prices."
On President Vladimir Putin's visit to India, both sides "reaffirmed their commitment to increasing Russian crude oil production under long-term contracts at preferential prices, and increasing LNG imports to India with the possible use of the Northern Sea Route for energy supplies."
Russia and India cooperate extensively on energy, including Indian companies' stakes in Russian upstream projects Sakhalin 1, Vankorneft, and Taas-Yuryakh.
"The parties also agreed to consider prospects for expanding cooperation on hydro and thermal energy, energy efficiency, and the use of renewable energy sources," the Kremlin said.
Continuing joint work on developing payments in national currencies to reduce costs, time, and risks associated with payments were also discussed. Interest in non-dollar payments including for energy resources has increased in Russia in recent years, due to the risk that Western sanctions may restrict Russian companies' access to the dollar in the future.
Series of agreements
During the bilateral annual summit in the Indian capital, Putin held discussions with Indian Prime minister Narendra Modi on a host of trade and energy cooperation issues.
"We are also adopting a long-term vision to deepen our relationship in the economic sector," Modi said at the summit.
Russia agreed to strengthen LNG imports to India, and the possible utilization of the Northern Sea Route for energy supplies, including crude and gas. "We have set a target of $30 billion in trade and $50 billion in investment by 2025," Modi said.
Russian oil major Rosneft signed one memorandum of understanding each with India's state-run No 1 refiner Indian Oil Corp. and ONGC Videsh.
While the agreement with IOC seeks to renew the previous crude supply agreement with Rosneft, the agreement with OVL led consortium seeks to promote education and training in the oil and gas sector.
In addition, IOC and Grazpromneft agreed to collaborate in vacuum gas oil hydrocracking technology, catalytic iso-dewaxing lobs and catalyst regeneration for fixed bed catalyst, said a statement issued in New Delhi after the summit Dec.6.
Both countries agreed to expand cooperation in the development of gas infrastructure and distribution projects, the use of natural gas in transport, and emerging fuels, including hydrogen.
Both countries also agreed to expand collaboration through Russian participation in the Indian petrochemical sector by way of investment, technological, and other means of collaboration.
An agreement was reached between IOC and Russia's integrated petrochemical company SIBUR to explore the feasibility to set up a dual-feed cracker unit along with downstream units at Paradip, in India's East Coast, the statement said.