Oil invitation

Sergei Ivanov offered India the Vankor field to Rosneft

Russian Deputy Prime Minister and Defense Minister Sergei Ivanov said yesterday during his visit to India: “We are interested in the participation of Indian capital in the implementation of the Sakhalin-3 project and in the development of the Vankor field in the Krasnoyarsk Territory.” The official’s words are alarming: while the participation of the Indian state-owned company ONGC in the Sakhalin-3 project was discussed several times, and Rosneft, as the owner of the license to develop the fields of this project, did not exclude such a possibility, then it considered the development of Vankor its prerogative. Neither Rosneft, nor the Ministry of Industry and Energy, nor the representative office of the Chamber of Commerce and Industry in India could comment on Mr. Ivanov’s statement.

The Vankor field, whose recoverable reserves reach 227 million tons of oil and whose design production level is 18.1 million tons per year, is attractive to any oil company. Rosneft got it in 2003 during the takeover of Anglo Siberian Oil Company. In November 2004, the Indian ONGC repeatedly reported that it was negotiating with Rosneft to purchase a certain share in this project. But the size of the share and the amount of the transaction were not disclosed. The Russian company explained that the Indians requested a package of geological information on Vankor, but there was no talk of any specific negotiations. At the same time, Rosneft said that it was going to conduct additional exploration at this field and only then decide on attracting third-party investors.

Last summer, the head of the Russian company, Sergei Bogdanchikov, stopped any attempts to talk about the participation of foreigners in the Vankor project: “We will not make such a gift to anyone, this is one of the most promising assets in the world, and we will develop Vankor ourselves.” According to the company's plans, this field should become the main supplier of raw materials for the Eastern Siberia-Pacific Ocean oil pipeline.

ONGC, one of the top ten global oil and gas companies in the world, has been trying for a long time and unsuccessfully to break into the Russian oil sector. She tried to participate in the auction for the sale of Yuganskneftegaz, which went to Rosneft, but abandoned this idea. Together with Itera, ONGC participated in the tender for Udmurtneft, which was sold by TNK-BP, but lost. So far, its only more or less successful project in Russia is a 20 percent share in the Sakhalin-1 project. To attract attention, ONGC promised to invest $25 billion in the Russian oil and gas sector. However, not a cent of this gigantic amount has been spent so far.

As for Sakhalin-3, with oil reserves of 97 million tons and gas reserves of 37 billion cubic meters, India has long been working with the Russian government on possible participation in this project. In particular, last year ONGC discussed this possibility with the head of the Ministry of Industry and Energy Viktor Khristenko. And Rosneft itself, it seems, is not against the participation of a foreign partner in this project as a minority shareholder. This was the case, for example, with Sakhalin-4 and Sakhalin-5, the development agreement for which the state company signed with British BP in November last year.

Anna GORSHKOVA