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Russian-Indian oil cooperation will mark its 50th anniversary this year.
In 1954, eight years after India proclaimed independence, dozens of Russian specialists arrived in India on the invitation of Jawaharlal Nehru's government. They helped lay the foundations of the country's industry, including by exploring and developing the nation's oil and gas fields. In 1959, they discovered the first oil field in the Bay of Cambay, and in 1960 a major oil field in Ankleshwar, thereby establishing India's oil and gas sector. Capitalizing on the Russians' experience, the Indians went even further and drafted a shrewd strategy for state investment in the more "sensitive" industrial sectors. They also embarked on a proactive campaign to enter international sectoral markets. Today, the partnership model has changed, as Russian companies now have to prove to their Western and Indian partners that they are competitive. The Indians' ability to retain national interests and strategic goals within their field of vision, and their consistent striving to maintain a balance between the development of the state and private sectors, are part of the current Indian "economic miracle." Russian business has to bear this in mind. As it plans Russia's economic expansion on Indian-type markets, the country's leadership faces a serious task: it must clearly establish what Russia can offer to its partners and what it wants from them. Vladimir Putin's latest visit to India in December 2004 was dubbed "purely businesslike" in the Russian and Indian press. In contrast to the declarations of strategic partnership that dominated Russian leaders' visits in previous years, Mr. Putin dedicated a great deal of his time to meetings with Indian business circles. The main subjects to be discussed at the meetings were established at a session of an intergovernmental commission held several weeks before the president's visit. They included space, defense and high technologies, engineering and energy. Interaction in the energy sphere is the most promising trend in Russian-Indian cooperation today. India's rapid industrial development means it is in serious need of power supplies, which largely dictates the business community's heightened interest in Russia's richest oil and gas fields and the employment of Russian experts at Indian deposits. Indeed, this is particularly true given that Russian-Indian economic contacts, which were largely neglected for some time, have been energetically restored in the past few years. The best-known example is the company ONGC Videsh, which became a full-fledged partner in the Sakhalin-1 project in 2001 by investing about $1.7 billion. Russian companies' Indian partners, such as GAIL (India) Ltd., the Essar Group, the Indian Oil Corporation Ltd., Gammon India Ltd., the Hindustan Petroleum Co. Ltd., the Bharat Petroleum Co. Ltd., Tractebel Engineers and Constructors Pvt. Ltd., and ONGK Videsh, have concluded contracts with them on projects under development in both Russia and India, as well as in neighboring states. They include the construction of the Iran-India and Myanmar-India gas pipelines, the development of gas and oil deposits in India, and programs to expand India's gas and electricity supply networks. Indian companies that are ready to invest in projects in Eastern and Western Siberia, European Russia and the Far East, have equally broad prospects for cooperation. India is considering partnership within the context of the entire Asian region. It is ready to initiate a meeting of the four major Eurasian oil and gas exporters (Russia, Kazakhstan, Azerbaijan and Turkmenistan) with the four major Asian oil and gas importers (India, China, South Korea and Japan). This is a sensational approach, as it means that rules of the game will be established for a new, rapidly developing sales and production market. In 2003, a Russian-Indian center for cooperation in the production of gas hydrates was opened, while India enhanced its cooperation with the Skochinsky Research and Development Institute. At a recent Petrotech conference in India, Professor Zapivalov from Novosibirsk State University led a delegation of Russian researchers who presented a number of reports on practical aspects of the development and restoration of oil and gas fields, as well as strategic models for this sector's progress in India.
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