The two companies have decided to set up a high-level task force which will look into the opportunities that exist in the gas sector in India and third countries along with exploring other possibilities of co-operation in areas such as coal bed methane, underground coal/lignite gasification and exploitation of natural gas hydrates, official sources said. Officials said a high-level team from Gazprom is slated to visit India by this month end and the exact areas for joint co-operation will be spelled out thereafter.

During the recent visit of the union petroleum minister VK Ramamurthy to Moscow for the Indo-Russian joint commission meeting, it was decided that the two countries will further intensify theirco-operation in the petroleum sector, particularly in joint exploration and exploitation of oil and gas fields. The meeting was also attended by ONGC Videsh, the overseas arm of the Oil and Natural Gas Corporation (ONGC).

Sources said a similar possibility of a task force between ONGC Videsh and Lukoil, an integrated oil producing, refining and marketing company in Russia, for export of oil products by Lukoil to India, is also being explored. ONGC Videsh is considering acquisition of stakes in a host of Russian oilfields.

Giving details, sources said ONGC Videsh has evinced interest in picking up equity in leading Russian companies including Rosneft, Tatneft and Sidanco besides Lukoil.

Talks are on between ONGC Videsh, Rosneft and Rosneft-Sakhalinmorneftegas for developing oil projects in Astrakhan region and on the Sakhalin Island. ONGC Videsh is also in talks with Tatneft for a possible participation in developing new oil fields in Tatarstan.

Decision and follow-up action on these issues alongwith the signing of a host of other agreements will take place this week during the visit of Russian prime minister Yevgeny Primakov to India.

Also accompanying him is Lukoil president Ali Tero, who will meet ONGC bigwigs and thrash out exact areas of co-operation with India.

Meanwhile, in order to fund its plans of acquiring equity in Russian oil fields, ONGC Videsh plans to raise $1 billion through ECB route and is in the process of appointing global investment bankers who will help it in raising this amount.

Insight
-- tieup will prop up local firm's bottomline

Gail's revenues are constrained by the inadequate supply of natural gas. Though the company is diversifying into petrochemicals and LPG supply, bulk of the revenue comes from transportation of natural gas. In spite of a huge demand-supply gap, the supply of natural gas by GAIL is only to the tune of 20-22 billion cubic metres. Any additional supply would definitely enhance Gail's revenues.

In addition, Gail is setting up an1,260-km LPG pipeline from west to north India in an effort to reduce the supply-deficit gap. Also, LPG growth rate in consumption is the highest and so are the margins in this product. The bottomline is again restricted to supply. Thus, any agreement between Gail and Gazprom dealing with enhanced supply of LNG or LPG to India is going to benefit Gail's bottomline.