India's state-owned oil firm ONGC is interested in acquiring a 49% stake in Russia's Tagul oilfield. The deal is likely to be formalized by the fourth quarter of this year.

ONGC Videsh Ltd. (OVL), the overseas arm of Indian state-owned petroleum company, Oil and Natural Gas Corporation (ONGC) is exploring the opportunity to acquire a 49% stake in Russian oil producer Rosneft Oil Co.'s Tagul field.

According to sources, the deal is likely to be around 1 billion dollars, though nothing has been officially announced. Since the Tagul field is not yet operational, OVL will have to share the cost of making the field ready for production.

Western sanctions targeting Russian oil companies prohibit the West’s largest oil companies from partnering with Russia in deep-sea and shale prospecting projects, as well as upstream transit towards India and China. Western companies are also not allowed to export to Russia high tech equipment used in oil exploration and production. Therefore, Russia has adopted a new "Asia Pivot" strategy, the most marked aspect of which is its turn towards India and China.

Indian firms have stepped up their efforts to secure energy assets in Russia. OVL has already acquired a 15% equity stake in Russia’s JSC Vankorneft from Rosneft for $1.27 billion and plans to acquire another 11 % stake in the oilfield.

In March this year, Rosneft and a consortium of Indian companies, Oil India, Indian Oil and Bharat PetroResources, signed a memorandum of understanding on the issue of cooperation regarding Vankor Cluster, that provided for conducting a joint analysis of a potential partnership with the purpose to develop Suzun, Tagul and Lodochny oil fields.

India currently imports more than 200 MT of crude oil ever year. The government aims to cut this figure down by 50% by the year 2030.

First published by Sputnik.

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