India's state-run explorer Oil and Natural Gas Corp (ONGC) made a big step toward strengthening its foothold in Russia on Tuesday, signing an agreement with Russian holding company Sistema.
ONGC has long been seeking to broaden its oil and gas base in Russia, the world's top energy exporter.
The company already has a stake in Russia's Sakhalin-1 oil and gas project in the Pacific, and in 2008 it acquired the small-sized Imperial Energy oil company in western Siberia.
Oil-to-telecom holding Sistema, controlled by Kremlin-friendly tycoon Vladimir Yevtushenkov, said it agreed to consider opportunities for a potential transaction with ONGC involving Sistema`s majority stake in oil company Bashneft.
It added that its 49 percent stake in mid-sized oil company Russneft, as well as ONCG's fully-owned Imperial Energy, may also be considered for possible deals.
Sistema also contrlols Sistema Shyam TeleServices, an Indian mobile unit.
"The parties further agree to consider joint investments in each other's existing and future exploratory assets in key countries," Sistema said in a statement during Russian President Dmitry Medvedev's visit to India.
"The agreement is non-binding. Nothing concrete has been discussed," a Sistema spokesperson told Reuters, declining to comment further.
This month, an Indian oil ministry official said ONGC was in talks with Bashneft to help the oil firm develop the newly acquired Arctic Trebs and Titov oilfields.
Russian media have said ONGC is interesting in buying a stake in Bashneft itself.