India's leading oil and gas firm, Oil and Natural Gas Corporation (ONGC) will bid for Russian oil reserves in the Trebs and Titov Arctic region. ONGC, the only foreign company to bid for the oil deposits will place its bid through its Russian subsidiary, Nord Imperial.

The area is question holds an estimated 200 million tonnes of oil reserves. Russia's Natural Resources minister said that although the reserves are 'classified as strategic' his government would allow ONGC to bid for a share but most likely with a national company. Sources say that ONGC could partner with Rosneft.

India has been looking at several countries to acquire strategic oil reserves domestic demand is rising rapidly. The government-owned companies have been on a shopping spree of oil and coal reserves around the world. These companies have the blessing and the financial backing of the Indian government which wants to make up for the loss of several strategic energy assets  to China.

The government had suggested to set up a sovereign wealth fund to cater to the financial needs of the state-owned companies, like ONGC, Indian Oil Corporation and Oil India Limited, which bid for energy assets across the world. During 2009, while China spent $32 billion in acquiring energy and resource assets around the world India spent only $2.1 billion.

Keeping with the government's mandate to go for energy assets abroad several countries have acquired or are looking to acquire shale gas reserves, mostly in the United States. Oil India Corporation is planning to buy shares in shale gas deposits in the United States and Australia. Bharat Petroleum bought stakes in two gas fields in Australia while one of India's largest private company, Reliance Industries, has spent $3.45 billion to make three shale gas deals in the US.

The Indian government is also planning to revive its plans to get natural gas from Iran. The initial plan, to build an Iran-Pakistan-India pipeline was stalled after security concerns and objections from the United States. India and Iran are now discussing about laying an undersea gas pipeline. Among other controversial deals, the Indian government is also looking to acquiring stake in British Petroleum's gas fields in Vietnam.

Russia is also looking to expand the oil and gas explorations further into the Arctic region. Russia pulled off an animated stunt when it planted its flag on the Arctic Ocean bed to state claim over the large reserves of untapped resources under the Arctic ice. This week Russia held a summit of the Arctic nations to present its case for claim on the oil, gas and other resources in the Arctic region.

With growing hunger for energy and resources, the world can expect more of such energy acquisitions some of which could be controversial as the strategic and economic tussle between India and China heats up.

Image: Captain Nandu Chitnis/ Wikimedia Commons

The views presented in the above article are author’s personal views and do not represent those of TERI/TERI University where the author is currently pursuing a Master’s degree.