COLLABORATION BETWEEN INDIA AND RUSSIA IN THE OIL AND GAS SECTOR
In 2017 India and Russia celebrated the 70th anniversary of establishing their diplomatic relations. India and Russia have always had heartfelt relations between both the Governments, its people and businesses. While relations continue to develop between the two countries, both have a common interest in enhancing their partnership in oil and gas sector.
India is the 3rd largest consumer of energy in the world. With the growing demand of energy in India, India imports 80% of its petrol and 50% natural gas for its consumption. On the other hand, Russia seems to be the largest producer and exporter of gas and oil.
Keeping India’s growing demand of oil and gas in mind, there is a need to import oil and gas at lower prices. It is expected that by 2040 India’s demand for oil would increase to 10 Million barrels per day, while currently it is 4 Million barrels per day. The only way one could meet such growing demand is through imports but at reasonable price so that economic growth doesn’t slow down.
Russia at present is trying to obtain new customers for its oil and gas exports to expand its market, as it currently solely depends on United Kingdom exports. As of now India and Russia have only focused on nuclear, oil and energy related investments. Currently Russia has a total share of 1% of India’s total oil and energy exports. Their current ventures areas include Liquified Natural Gas and energy finance market which is an operative way of encouraging partnership between the two countries.
Various experts believe that poor air quality index throughout India and global warming index indicates that India needs to lessen the use of coal, which is one of the most favored and cheapest fuel available in India. Thus, India needs to import cleaner form of energy resources from countries like Russia, to improve the environment conditions prevalent in the country.
Thus, this collaboration between India and Russia is expected to produce vibrant, logical and mutual benefits for both the countries.
Aakritee Gambhir
Associate
The Indian Lawyer
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