Govt officials rush to Russia to fix energy deals

The nuclear-deal-in-the-making with the US has forced the government into a firefighting mode not only domestically, but also internationally, where it is working overtime to avoid straining relations with the key long-time ally "" Russia.

This, said a senior official in the petroleum ministry, is the reason why Indian ministers and bureaucrats are making a beeline to Moscow. "There are many business deals with Russia in the pipeline, primarily in the oil sector," the official said.

"They start from the Sakhalin-III oil and gas field, and could even result in an Indian company joining the Kazakhstan-China gas pipeline project, which passes through Siberia," he added.

Since the brouhaha over the 123 Agreement, which would operationalise the nuclear cooperation, India has drawn up a long list of envoys who are set to touch base in Moscow.

National Security Advisor MK Narayanan was the first senior official to visit Moscow in August. Army chief JJ Singh will be visiting the city in September, followed by Defence Minister AK Antony in October.

External Affairs Minister Pranab Mukherjee will also reportedly visit Russia soon. Prime Minister Manmohan Singh's schedule in November is likely to round off the series of visits and result in some concrete announcements, "which will prove that it is business-as-usual with Russia," according to officials.

Oil and Natural Gas Corporation (ONGC), which has a 20 per cent stake in the oil-rich Sakhalin-I field, is likely to bid for a stake in Sakhalin-III as well. It is likely to be opened up for bidding after the Russian presidential elections are over in March 2008.

"The point is that ONGC will bid for a stake in the block even if there is very little hydrocarbon in the field. It has more to do with diplomatic relations than business ones," another senior oil ministry official said.

A team from ONGC and ONGC Videsh, ONGC's overseas investment subsidiary, recently visited the Sakhalin-III field to study its potential. A report has been prepared which makes a case for investment, the official said.

This is one example of how the government is making sure that its special equation with Russia is maintained. "Our friendship dates back many years. We intend to maintain it," an official said.

Russian officials in India echo similar sentiments. "We, in a sense, don't have any problems with India's nuclear agreement with the US because we want a world free of the race for nuclear weapons. The agreement would go a long way towards ensuring that," one official said.

One of the deals that could however be affected is the supply of combat aircraft by Russia to India. Defence Minister AK Antony has reportedly told his ministry officials that all care be taken that the Russians are not ignored in the face of the fact that many US companies have been shortlisted for the acquisition of 126 multi-role combat aircraft by the Indian Air Force.

This is in contrast to what is happening in the US-blacklisted Iran, where most of the deals in the pipeline are expected to end in naught. Oil ministry officials have almost shoved the much-awaited gas pipeline deal from Iran to the backburner.

Petroleum Minister Murli Deora's visit to Pakistan in August to iron out the deal has not materialised. Further, the two-year old deal for supply of Liquefied Natural Gas (LNG) from Iran "" which has not been operationalised due to demand for a higher price by Iran "" is set to expire in October this year, and is not likely to be renewed.

"Even the development of the rich South Pars field by Indian companies is not taking place," the government official said. The positives from the government's point of view are that Russia appears to be allowing business deals to continue.