New Delhi: India’s oil and steel minister minister Dharmendra Pradhan will be visiting Moscow on Thursday and Friday, ahead of Prime Minister Narendra Modi’s impending visit to Vladivostok.
PM Modi is expected to participate as the chief guest in the 5th Annual Eastern Economic Forum and also the 20th Annual Bilateral Summit between the two allies that is to be held during the first week of next month.
The visit comes in the backdrop of Russia coming out in support of India’s move to revoke a provision of its constitution and integrate Jammu and Kashmir more closely with the rest of the country.
Also, Organisation of the Petroleum Exporting Countries (Opec) plus arrangement including Russia has extended its compact for production cuts. India has been urging its long time ally Russia to take into account the interest of energy consuming nations during its engagement with the oil producers block.
“Minister of Petroleum and Natural Gas and Steel, Shri Dharmendra Pradhan, will lead a business delegation from oil & gas as well as steel sectors to Moscow from 29-30 August, 2019. This will be his first overseas’ visit since his assumption of office," petroleum ministry said in a statement on late Wednesday evening.
Any production cut by Opec and its allies has a wide-ranging impact on energy markets, given that Opec accounts for around 40% of global production. It is expected to have a particular fallout on India due to Opec accounting for around 83% of the country’s total crude oil imports.
Pradhan will be meeting Russia’s energy minister Alexander Novak, Deputy Prime Minister of the Russian Federation and the Presidential Plenipotentiary to the Far East of Russia.
“Discussions will focus on further strengthening bilateral energy cooperation, including in oil & gas, steel and coal sectors.The Indian steel sector is exploring ways to ensure raw material securitization for its stakeholders," the statement added.
This also comes against the backdrop of sanctions on Russia, where India owns stakes in significant hydrocarbon assets. Indian firms have invested $10 billion in acquiring stakes in hydrocarbon assets in Russia. Also, a consortium led by Russia’s Rosneft PJSC acquired Essar Oil Ltd for nearly $13 billion.
“Minister Pradhan will also meet the Deputy Prime Minister of the Russian Federation and the Presidential Plenipotentiary to the Far East of Russia to discuss the follow-up on the collaborative activities identified by Indian companies during their visit to Far East Russia earlier this month," the statement added.
This visit comes at a time when there has been growing uncertainty in the global energy market with tensions building up in the Persian Gulf after US President Donald Trump pulled his country out of a 2015 historic accord with energy-rich Iran that was inked to curb the Islamic Republic’s nuclear programme in return for ending sanctions. Also, factors such as falling production in Venezuela and geopolitical tensions have fuelled the uncertainty in international energy prices.
India has been calling for a global consensus on “responsible pricing," with China and India moving ahead to set up a joint working group (JWG) on energy to form a buyers’ bloc to bargain collectively for oil supplies.