Russia’s biggest oil company Rosneft and the state-run Indian Oil Corporation (IOC) have agreed on deliveries of 40,000 barrels of crude per day to India via the port of Novorossiysk by the end of this year, ET Energy World reports.
The deal was signed during Rosneft CEO Igor Sechin’s visit to New Delhi.
“This is just the beginning,” said India’s Oil Minister Dharmendra Pradhan after meeting with Sechin.
According to the Indian oil minister, the South Asian country also wants to participate in the Vostok Oil project in the Russian Arctic.
Under the contract with Rosneft, Indian Oil will exercise its option to buy Russian grade Urals oil, an IOC source told Reuters. Indian state refiners typically buy Russian oil via the spot market rather than under a contract.
As the world’s third-biggest oil consumer and importer, India has recently been diversifying the sources of its crude oil imports. The country which ships in more than 80 percent of its crude needs has been relying on the Middle East for most of its supply. However, its imports from the region slid to a four-year low in 2019.
According to the sources, the Russian energy giant is also keen to bid for the acquisition of Bharat Petroleum Corp Ltd (BPCL).
Rosneft, which is the majority owner of India’s second-biggest private oil refinery, is keen to expand in the world’s third-largest and the fastest-growing energy market.