Reports: Indians Offer $25Bln in Investments

India has offered the government the prospect of $25 billion in investments into Russia's oil and gas industry as New Delhi seeks to secure supplies and a stake in Yuganskneftegaz, Russia's two leading business dailies reported Tuesday.

If the mammoth investment ever materializes, it will be the single largest foreign investment in the Russian economy.

India's Petroleum and Natural Gas Ministry made the proposal in a letter sent to Prime Minister Mikhail Fradkov last week, Vedomosti said, citing a government official.

Kommersant reported that Indian Petroleum and Natural Gas Minister Mani Shankar Aiyar presented the investment offer to Russian officials as part of India's state-owned Oil and Natural Gas Corp.'s attempt to purchase a stake in Yugansk.

Aiyar held talks in Moscow with Industry and Energy Minister Viktor Khristenko, Gazprom CEO Alexei Miller and Rosneft President Sergei Bogdanchikov on Monday and Tuesday.

The Russian side agreed to look at proposals for Indian companies to work with Gazprom, Rosneft and Transneft, the Industry and Energy Ministry said in a statement after the meetings.

"Russia is ready to look at proposals from the Indian side on participation in projects," Khristenko said in the statement.


"We are satisfied with the level and character of Russian-Indian relations and we must maintain and develop these relations."

ONGC is negotiating with Gazprom over a string of major oil and gas deals that could see the Indian firm invest up to $20 billion in the next few years, ONGC chairman Subir Raha said in an interview with Reuters.

"The investment may go up to $20 billion or more for a period of five years or so, and if we reach an agreement, we could begin as early as next year," Raha said.

"What we are saying is, Gazprom has a huge amount of gas and we have the money."

The two companies signed a memorandum on Monday to jointly develop energy projects in India, Russia and other countries.

India, like China, is seeking to secure oil and gas supplies to feed the soaring domestic energy consumption of its boom economy. The world's biggest natural gas producer and second-biggest oil producer, Russia is becoming an increasingly important global energy player as large oil consumers seek to diversify away from the Middle East.

Yugansk, a former Yukos asset auctioned off by the government, offers a tempting opportunity for India and China as they seek to forge closer ties with Russia and to secure access to one of the country's foremost oil producers.

Yugansk, which produced nearly 12 percent of the country's annual oil output last year, is controlled by Rosneft, which bought Baikal Finance Group, the mystery bidder that won the December auction for Yugansk.

Raha declined to comment on the progress of ONGC's purchase of a stake in ex-Yukos unit Yugansk, or in projects such as Rosneft's vast Vankor field in Siberia.

But he stressed ONGC was keen on equity participation rather than joining any particular projects, Reuters said.

Raha said he was not enthusiastic about a loan-for-oil deal of the kind concluded by China National Petroleum Corp., which lent Rosneft $6 billion in return for 48 million tons of crude by 2010, the news agency said.

"China's problem is it has immediate demand, and they needed the oil for their coastal refineries. We do not. We would like long-term security through equity participation," he told Reuters.

Raha said one of the planned projects involved gas production in the Far East or Sakhalin, and building liquefied natural gas facilities on the Pacific coast. Sakhalin is home to Russia's first LNG project, led by Shell, in which neither Gazprom nor ONGC is currently involved.

ONGC will also likely participate in future tenders to develop oil and gas deposits in eastern Siberia, he added.

As the future of Yugansk remained unclear pending a decision by a judge in a Houston court, Rosneft said Tuesday it had hired Yugansk's former general director, Sergei Kudryashov, as first deputy chief executive to run oil production.

Kudryashov, 37, was appointed to run Yugansk in May 2003, and was seen by locals in Nefteyugansk as a young manager parachuted in from the outside at the behest of then-Yukos CEO Mikhail Khodorkovsky.

He worked in various positions in Nizhnevartovskneft from 1991 to 2000 and then worked in Tomskneft, another Yukos production unit, before being appointed to run Yugansk.