President begins visit,eye on reinforcing ties with Russia

Interaction between India and Russia is sustained and conducted at the highest official level and derives traction from an annual meeting between the Indian PM and the Russian President.

Patil’s visit,in the course of which she will attend a marquee event of the “Year of India in Russia”,nonetheless coincides with a perceived attempt to defend,and be seen to be defending,bilateral ties against the impression of drift and business-as-usual.

In a departure eve briefing,Foreign Secretary Nirupama Rao said the visit could be seen in “geo-civilisational” terms,and was “also meant to tell the world about the nature of the civilisational (ties) between the two countries”.

Nostalgia is a confidence building instrument for India and Russia,who,as foreign office officials stress,share no major geopolitical disagreement. But post-1991 disruptions have meant that the two countries have had to refashion their global engagement — in defence trade,technological cooperation and navigation through diverse international institutions and groupings.

The President,significantly,dwelt on cooperation in the oil sector: “Russia is one of the largest sources of hydrocarbons in the world. Indian companies have established their presence in this important sector within Russia. I hope that our cooperation in this area can grow from strength to strength.”

Murli Deora,Union Petroleum and Natural Gas Minister,who is accompanying the President,when asked about his expectations from the visit quipped,“What can I look forward to but oil.” ONGC-Videsh Limited has a 20 per cent stake in the Sakhalin I oil and gas project and has invested 2.8 billion dollars so far. But India is conscious that here in Russia too it is trailing countries like China in mopping up long-term contracts for energy security.

This is a good time for deal-making. With crude oil in the region of $75,after a year in which it fluctuated between $35 and 147,both buyers and sellers may be more mutually reassured to strike a contract.

Russia is the world’s second biggest oil exporter,and the largest outside of OPEC. It is also the world’s largest gas exporter,but given India’s neighbourhood,delivery mechanisms remain a problem. By one estimate put out this summer,only 3 per cent of Russia’s energy exports head for Asia. It is a figure that is bound to increase.

Oil and natural gas are at the heart of Russia’s economy and diplomacy and by extension the great revival by Vladimir Putin after the economic collapses of the 1990s. Russia’s stabilisation fund,made up of oil revenue,was 137 billion dollars by the end of 2008. It had helped the country deal with the recession and low energy prices that have brought it from years of 7 per cent growth to this year’s contraction,with the economy shrinking by 9.5 percent in the first quarter. With oil prices rebounding,the yearly average should be much healthier.