India, Russia agree to resolve investor concerns in oil and gas projects

New Delhi: India and Russia on Friday discussed strengthening energy cooperation, with both nations agreeing to resolve the challenges faced by their investors in the oil and gas sector.

At the 2025 annual summit in New Delhi, the two sides also discussed expanding ties in other areas of energy, including oil, petrochemicals, liquefied petroleum gas (LPG), liquefied natural gas (LNG) and related infrastructure, according to a joint statement issued after the meeting between prime minister Narendra Modi and visiting Russian president Vladimir Putin.

The talks assume significance, as India's state-run ONGC Videsh (OVL) has been raising concerns about not receiving equity oil for its 20% stake in Russian oil company Rosneft’s Sakhalin-1 project. Mint earlier reported that the Russian Federation and Rosneft have stuck to their stand on paying dividends in lieu of OVLs' stake in the Sakhalin-1 oil and gas field, even as India wants equity oil as agreed earlier.

Indian energy companies have also been struggling to repatriate dividends from their Russian oil and gas assets, with large sums still stuck in Russia.

The talks between Modi and Putin come at a time when the US has been pressuring India to cut Russian oil imports and imposed sanctions on major suppliers Rosneft and Lukoil with effect from 21 November.

Both sides discussed and commended their wide-ranging cooperation in the energy sector as a significant pillar of the 'special and privileged strategic partnership', the joint statement added.

"They also noted the importance of expeditious resolution of issues related to investment projects in this area, and agreed to resolve the various concerns being faced by their investors in the energy sector," the statement said.

Apart from a 20% stake in Sakhalin-1, OVL also holds a 26% stake in CSJC Vankorneft, which is the owner of Vankor Field and North Vankor licence, where an Indian consortium comprising state-run Indian Oil Corp. Ltd., Oil India Ltd. and Bharat PetroResources Ltd. also hold 23.9% stake. RN Vankor, an affiliate of Rosneft which holds 50.1% stake, is its operator. In addition, a consortium of Indian Oil Corp., Oil India and Bharat PetroResources have a 29.9% stake in LLC Taas-Yuryakh. OVL also acquired Imperial Energy Corp. Plc. that has 10 exploration and production (E&P) licence blocks in the Tomsk region of western Siberia.

During Putin's two-day visit to India, his first in four years, both sides sought to deepen cooperation across trade, energy technology, connectivity, and defence among other sectors.

Russian-state owned energy major Rosneft has around 49% stake in Nayara Energy, which operates a refinery in Vadinar, Gujarat. In 2019, Rosneft became the first Russian state-owned energy giant to invest in India’s energy space, when it acquired a 49.13% stake in Essar Oil India from Essar Energy Holdings Ltd and its affiliates, and in 2018 rebranded it as Nayara Energy. The refinery has been impacted by sanctions by the European Union.

According to the joint statement, both sides noted the current and potential cooperation between Indian and Russian companies in fields such as oil and oil products, oil refining and petrochemical technologies, oilfield services and upstream technologies and related infrastructure, LNG and LPG related infrastructure, various existing projects in their countries, underground coal gasification (UCG) technology, and nuclear projects among others.

Energy partnership between the two countries has increased in the past few years. Russia has also been the top supplier of oil to India since FY23, as it offered deep discounts amid western curbs and sanctions following the outbreak of war with Ukraine in February 2022. However, after the implementation of US sanctions on Rosneft and Lukoil, exports to India have somewhat declined.

Energy played a key role in bilateral trade between New Delhi and Moscow as it hit a record $68.7 billion in FY25, nearly 7 times the pre-pandemic level of $10.1 billion. India imported $63.84 billion worth of products in the last fiscal, mainly crude oil.