New Delhi: India is exploring the possibility of major investments in fossil fuels and other areas of the energy sector in Russia’s Arctic region, which is a new global source for both renewables and non-renewables.
India’s current investment in Russia stands at $15 billion in oil and gas projects and it is looking to expand its presence in the new oil project being developed by the Russian national oil company in the Arctic, according to people aware of the matter.
The Indian Ambassador to Moscow hinted in a recent briefing for local media in the Russian capital at India’s growing interests in the Arctic region.
The two sides are currently holding discussions on the issue, said the people. India’s recently released draft Arctic policy hinted at increasing presence in Russia’s Arctic region. It said the region contains reserves of “mineral deposits – copper, phosphorus, niobium, platinum-group elements and rare earth”.
India is also exploring ways to harness renewables – hydroelectricity, bioenergy, wind power, solar, geothermal, and ocean energy – from Arctic regions under the jurisdiction of Russia and other countries.
Former president of Iceland, Olafur Ragnar Grimsson, had said in a lecture last year that India’s interest in a “faraway place”, the Arctic, was justified because “the future of India, will be, to a large extent, determined by the Arctic and the future of the Arctic will also be determined by what takes place in India and other Asian countries”.
Pointing out that the Arctic is “extraordinarily rich in energy resources and ocean resources”, he had said that “over 20% of Russian exports earning now come from the Russian Arctic”.
Russia recently put in place a ministry not just of the Arctic but the combined ministry of the Far East and the Arctic. There are gas pipelines from Russia to Europe but recently an 8,500-kilometre pipeline has been constructed from the Russian Arctic all the way down to Shanghai in China.
India’s draft policy highlighted that ice-free conditions in the Arctic were resulting in the opening of new shipping routes, thereby lowering costs and reshaping global trade. It said India seeks to participate in the environmental monitoring study to evaluate the predicted emissions of ships likely to traverse this route in the future.
India is hoping to use the Northern Sea Route – the main sea route in the Russian Arctic for transportation – which will reduce time taken for transportation of cargo in the Indo-Pacific region, said people aware of the matter.
The Russian ministry of transport forecasts that cargo turnover along the Northern Sea Route will grow significantly. The route crosses seas of the Arctic Ocean (Kara, Laptev, East Siberian and Chukotka) and partially the Pacific Ocean (the Bering Sea). The Northern Sea Route from the Kara Gate to the Providence Bay is about 5,600 km long. The distance between St. Petersburg to Vladivostok along the Northern Sea Route is more than 14,000 km while the distance vessels have to cover by the Suez Canal is more than 23,000 km.
Russia is looking to develop the Vostok Oil mega project in Siberia, which includes the Vankor and Payakha clusters and has resources estimated at 44 billion barrels. The project, in Russia’s Far North, includes the Vankor cluster, the Zapadno-Irkinsky block, the Payakhskaya group of fields and the East Taimyr cluster. All those clusters are close to the Northern Sea Route that Rosneft wants to use to ship oil to Europe and Asia.
Simultaneously, India and Russia are expediting the revival of Chennai-Vladivostok shipping link as part of their partnership in the Indo-Pacific region.