India is keen on an equity stake in the Russian company Yukos' assets. Unlike China, which has offered to lend money, India wants a long-term presence in the company, senior officials told Business Standard.

India is negotiating with the Russian government, which had offered 76.6 per cent of Yukos' Yuganskneftegas in December to partly make up for its $27 billion tax arrears.

Rosneft bought over Yuganskneftegas, which pumps 1 million barrels a day of crude or 60 per cent of Yukos' output, through a front company called Baikal Finance for $9.4 billion.

India, through ONGC Videsh Ltd, wants to pick up 15 per cent equity in Yuganskneftegas, the main asset of Yukos. China through China National Petroleum Company is keen on a 20 per cent stake.

"Rosneft needs ready money to pay off Yukos' liabilities and, therefore, the Chinese offer appears more attractive," said an official.

Early last year, Chinese Prime Minister Wen Jiabao had proposed an investment of $12 billion in the Russia's energy infrastructure sector by 2020.

Unlike India, China has been buying crude oil from Yukos and was, therefore, keen to lend money to Rosneft against a future supply contract.

Yukos is also piloting a proposed $2.5-billion pipeline from Siberia to Datsin, China, for exporting crude oil. The Russian government, however, is resisting the plan.

Both India and China, with their growing appetite for oil and gas, have a strategic need to diversify their energy sources. Currently, they are dependent on West Asia for oil.

China would have to rework its relationship with the new owners of Yukos and its assets since it was buying around 7 million tonne oil annually from it.

There are some doubts in the Indian government over whether OVL should enter the race. Yukos has filed for bankruptcy protection in the US which could lead to legal problems, they point out.