Context- Recently Minister of Petroleum and Natural Gas & Steel Shri Dharmendra Pradhan today visited Sakhalin oil field in Russia

• ONGC Videsh Limited has 20% stakes of Sakhalin-1 since 2001, as a part of Late Atal Bihari Vajpayee’s vision of developing energy links with Russia
• Shri Pradhan visited the Rig “Krechet” which is the biggest and most powerful land rig in the world. It is a covered rig to allow people to work in extreme temperature (-40 degree Celsius in winter)-  it drills up to 14 KM in horizontal drilling.

Significance

• Sakhalin is an important development in the annals of long lasting friendly relationship between India and Russia.
• The remote far east areas of Russia is also significant as India has its largest investment overseas in this project.
• This also marks an important achievement towards securing India's energy security as production from the field is expected to last for over 30 years.
• OVL is holding 20 percent equity in the project and proposes to make about 2.8 billion US dollars investment, when the project is slated to be fully developed in 2006.

India-Russia-US energy triangle

• India is engaging both the United States and Russia as part of its agenda to diversify away from acute dependence on OPEC for energy sources.
• It also means that the United States and Russia, besides vying for a share of the Indian defense market, will now increasingly find themselves in competition for India’s energy pie as well.
• India will seek to keep a balance between the two as far as energy cooperation is concerned, despite any complications that may arise due to the United States bringing into force the Countering Adversaries of America With Sanctions Act (CAATSA), which targets third parties engaging in significant transactions with Russia’s energy and defense sectors.
• But Russia is not the only new growing source for India’s crude imports. In August 2017, a crude delivery from the United States reached India for the first time after an interregnum of 42 years. Like Russian blends, U.S. sour crude from shale deposits is also suitable for Indian refineries and despite freight costs, is still proving to be cheaper than India’s imports from nearby OPEC suppliers such as Saudi Arabia