India, Russia sign oil deal

By Vladimir Radyuhin

MOSCOW, FEB. 10. India and Russia have signed an historic accord on massive Indian investment in the Sakhalin oil and gas fields that will give a major boost to their bilateral economic relations.

ONGC-Videsh Ltd. (OVL) and the Russian State-owned Rosneft company signed the agreement in the presence of the Union Minister for Petroleum and Natural Gas, Mr. Ram Naik, and the Russian Deputy Prime Minister, Mr. Victor Khristenko, in Moscow on Saturday.

OVL has acquired a 20-per cent stake from Rosneft in the Sakhalin-1 offshore project in the Russian Far East. Under the accord, OVL would invest between $ 1.5 to $ 2 billion into the project over the next five years before oil and gas production commences in 2005-2006. It would be India's biggest single- project investment abroad and the largest foreign investment in Russia.

Mr. Naik praised the deal as representing ``a quantum jump in Indo-Russian economic relations... In the context of Indo-Russian relations years from now, the Sakhail-1 project will be remembered in the same way as we think today of Indian steel plants, like Bhilai.''

Sakhalin-1, a huge upstream project, consisted of three offshore fields being developed by an international consortium under a Production Sharing Agreement (PSA).

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