NEW DELHI: Giving further impetus to the formation of a much talked about joint venture company, the Oil and Natural Gas Corporation (ONGC) and Russia's Rosneft on Thursday signed a memorandum of understanding to study the possibilities of mutual projects in exploration, production and the marketing sector in India, Russia and other countries.

The MoU, signed by ONGC chairman, R. S. Sharma and Rosneft President, Sergey Bogdanchikov, is aimed at expanding the relationship between the two countries and companies that had started on a positive note with partnership in the Sakhalin-I project. The signing of the agreement coincides with the visit of the Russian President, Vladimir Putin, to India.

The two companies agreed to jointly explore the options for participation in refining and retail marketing projects in India, including integration of other companies in India. To implement the MoU, Rosneft and ONGC would establish two joint study groups — of which one will be responsible for upstream and the other for downstream. Upon jointly identifying a project, both would mutually decide on the structure of the joint venture to implement the identified project. Under this agreement, ONGC would operate in Russia and other countries under ONGC Videsh Limited (OVL).

Speaking on the occasion, Mr. Bogdanchikov said his rapidly expanding company could not ignore the high potential of the Indian market. "It will be ideal to match growing Russian production with the growing Indian market through dedicated joint ventures,'' he remarked.

Mr. Sharma said the signing of the MoU should open up opportunities for both companies to work together in Russia, India and third countries.

Officials said the signing of the MoU could well pave way for both companies pitching for a joint stake in Sakhalin III and IV and other oil and gas projects up for grabs in Russia, India and other countries. It is also indicative of the likelihood of both companies joining hands in the near future to form a joint venture company to take up business independently.

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