A consortium of three Indian state-run companies, Oil India, Indian Oil Corporation (IOC) and Bharat PetroResources, has signed energy deals with Rosneft to acquire the Russian company’s most promising assets in Siberia. CEO of Rosneft Igor Sechin has made an official announcement in this regard in New Delhi, saying that the deal will decrease India’s dependence on oil and gas imports.

Earlier, Prime Minister Narendra Modi had hinted that India would cut oil imports by 10% in the next six years by purchasing foreign energy assets. The prime minister made clear that India would take advantage of low global oil prices and the slowdown in China’s overseas acquisitions.

On the basis of the deals signed between the Indian consortium and Rosneft, the biggest listed oil producer in the world (by output) will allow Oil India, Indian Oil Corporation and Bharat PetroResources to increase their stake in the Vankor oil field to nearly 50% and acquire around 30% of the Taas-Yuriakh field.

The deals will also help Rosneft in a different way. Sechin explained that it would be easier for Rosneft to pay off debts incurred in its USD 55 billion acquisition of TNK-BP in 2013. During their meeting in December, President Vladimir Putin had assured Prime Minister Modi that Moscow would deepen its Soviet-era economic ties with India. Putin said that Moscow decided to supply oil to one of the world’s fastest-growing economies in an attempt to boost bilateral ties. Modi welcomed President Putin’s decision to grant stakes to Indian oil firms.

Addressing a press conference in the Indian capital on Wednesday, Sechin said that the deals would not only help India secure Russian oil output, but also help Rosneft gain access to the huge Indian market. During his stay in India, Sechin met senior Essar Oil officials to discuss a separate deal between Rosneft and the Indian firm. Under the deal, Essar Oil will acquire a 49% stake in the 400,000 barrel-per-day Vadinar refinery in western part of India in the next three months. “We are establishing a reliable energy bridge between our countries, which will be developing the interests of both Russia and India,” Sechin told the press.

Foreign policy experts are of the opinion that Russia wants to strengthen ties with India because of the current global political landscape. The Russian economy is facing deep crisis, as it has been badly hit by Western sanctions and a plunge in global oil prices.

Koushik Das, based in the Indian capital of New Delhi, is a senior news editor with more than 15 years of experience. He also runs a blog - Boundless Ocean of Politics. E-Mail: [email protected]