India and Russia on Monday agreed to enter into a joint venture to explore oil and gas, mainly in Central Asian countries.
This is a significant move as Central Asian countries are fast emerging as the hot energy destinations for countries with energy deficits.
The partnership was announced after a meeting between Prime Minister Manmohan Singh and Russian Energy and Industries Minister Viktor Khristenko on Monday afternoon.
Dr Singh also conveyed India's interest to have more equity partnership in Russian oil and gas companies.
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India has already invested heavily in Russia's Sakhalin One project.
Experts say the joint venture, which will set both countries up for a long-term energy partnership, will also have a big geopolitical impact in the region, where United States is active behind the scenes.
US multinationals have already entered the region riding on advantage of advanced technology and huge investments.
Many say India's agreement is well-timed.
This is because Russia will soon loosen its grip on state-controlled gas giant Gozprom, which has control over about 60 per cent of Russia's gas reserve.
This makes for about 16 per cent of the world's gas reserve and places Gozprom third in the global gas sector only behind Saudi Arabia and Iran.
Besides this, Gozprom also has the world's biggest pipeline network.
Its stocks are currently the hottest in Russian markets and as part of loosening its grip over it, Russia is likely to lift restrictions on foreign ownership of its shares.
Experts say India will stand to gain a lot if it manages to pocket some Gozprom shares before it's price soars.
Complete coverage of Dr Singh's visit
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