Saturday, October 1 2005 15:00 Hrs (IST) - World Time -

Sakhalin (Russia): Russia today (Oct 01, 2005) indicated its willingness to take along Indian companies such as ONGC Videsh Ltd for exploration of oil and gas in future Sakhalin projects as well as enhancing energy cooperation in third world countries.

"We discussed prospects of Indian firms' participation in exploration and production business in India, Russia and third world countries," Russia's Minister of Industry and Energy Viktor Borisovich Khristenko said after a three-hour meeting with Petroleum Minister Mani Shankar Aiyar.

Khristenko said a lot of ground work has already been done and the meeting with his Indian counterpart this morning discussed prospects of further cooperation in energy sector.

Aiyar, who witnessed along with the Russian Minister beginning of oil and gas production from Sakhalin-I fields, said Russia is willing to consider (New Delhi's participation) provided India and Indian companies come up with right terms.

"There is a distinct possibility of our being involved in other projects. Indo-Russian prospects on the Sakhalin islands appear most favourable," he added.

Sakhalin-I and II projects have already been decided and Russia is planning to invite bids in future for Sakhalin-III, IV, V and VI projects in the vast energy-rich region.

ONGC Videsh, the overseas arm of state-run Oil and Natural Gas Corporation, has 20 per cent stake in ExxonMobil-operated Sakhalin-I project, which today started producing about 23,000 barrels of oil per day and ramp up production to 250,000 bpd by 2006-end.

ONGC Videsh is eyeing oil fields in East Siberia, which is estimated to hold some 20 billion barrels of reserves. It is also looking at participating in Russian continental shelf, that may contain oil and gas in 4 million sq km of its total area of 6.5 million sq km (largest in the world).

The talks between the two ministers today is believed to have covered issues like participation of OVL in the 3.2 trillion cubic meters super giant gas field Shtokman and Prirazlomneye oilfield, which holds recoverable oil reserves of more than 83 million tonnes.

Besides involvement of Indian firms in pipeline projects, Aiyar's agenda for today's meeting also included OVL's interest for stake in Sibneft, Russia's fifth-largest oil producer, which is being bought over by Russian gas monopoly Gazprom for 12-billion dollars. OVL's investment radar is also scanning a smaller firm, Severnaya Neft.

Other areas of interest for OVL include exploration blocs in Timan-Pechora area, Sakhalin-3 and 6 projects, Vankor oil field and exploration properties in East Siberia.

Khristenko had yesterday said that Sakhalin-3 and blocks in Timan-Pechora would be put on auction after Russia passes a new Sub-Soil Law. He, however, did not give a time frame for enactment of such a law, which would lay down the rules for auctions, tax regime and exploitation procedure.

OVL wants to join hands with either Rosneft or Gazprom to bid for Sakhlain-3 project and Timan Pechora fields.

Officials said it also wants to join Rosneft in Kazakhstan's Kurmangazy oilfield and purchase part of Yuganskneftegaz, the erstwhile firm of Russian oil major Yukos, which Rosneft acquired few months ago.