In Russia, Indian state oil firms have made investments amounting to a combined total of $5.46 billion in acquiring stakes in four distinct assets. Among the investments made by Indian state oil firms in Russia, they acquired a 49.9 per cent ownership interest in the Vankorneft oil and gas field and a 29.9 per cent ownership interest in the TAAS-Yuryakh Neftegazodobycha fields.
However, due to the ongoing conflict between Russia and Ukraine, India’s flagship overseas firm, ONGC Videsh, has less than $100 million of dividend income remaining in Russia. Despite this, the company is not in a rush to repatriate the funds, according to a senior official.
The Indian state oil firms receive dividends from the profits generated by the operating consortium through the sale of oil and gas produced from these fields. Following Russia’s invasion of Ukraine in February of the previous year, the country imposed restrictions on repatriating dollars to stabilize foreign exchange rates.
In July 2022, ONGC Videsh (OVL), the overseas subsidiary of Oil and Natural Gas Corporation (ONGC), received its most recent dividend payment. Since then, one dividend payment has been left untouched in the company’s Russian account.
Rajarshi Gupta, the managing director of OVL, stated that the dividend income in Russia is “less than $100 million.” He emphasized that the company is not in a hurry to retrieve it, as it requires capital and operating expenses for its three projects in Russia. He further emphasized that there are no disruptions or changes in the normal course of business when it comes to dividends. OVL maintains its stake in Russia through a subsidiary based in Singapore.
Since Moscow designated Singapore as an unfriendly nation, money cannot flow from Russia to any company incorporated in Singapore. OVL is currently exploring suitable banking channels for repatriation, and discussions are underway.
Last week, officials from Oil India announced that $300 million in dividend income, belonging to the company and its partners, is also stuck in Russia. The consortium comprising Oil India, Indian Oil Corporation (IOC), and Bharat PetroResources Ltd holds stakes in two projects.
The dividend of $300 million was retained by Commercial Indo Bank LLC (CIBL), which is a collaboration between the State Bank of India and Canara Bank. In March, Canara Bank sold its 40 per cent stake in CIBL to SBI.
Dividends from TAAS were paid quarterly, while earnings from Vankorneft were paid biannually. The Indian firms are currently exploring options for repatriating the funds from Russia.
Apart from these investments, OVL holds a 26 per cent stake in the Vankor cluster, which includes the Suzunskoye, Tagulskoye, and Lodochnoye fields in West Siberia. Indian Oil Corp (IOC), Oil India Ltd (OIL), and Bharat PetroResources Ltd also hold a combined stake of 23.9 per cent in Vankor, with Russia’s Rosneft as the operator holding a 50.1 per cent interest.
Furthermore, the TAAS-Yuryakh Neftegazodobycha fields hold a 29.9 per cent stake owned by the consortium of OIL, IOC, and Bharat PetroResources. Despite the geopolitical tensions, the operations of these fields remain unaffected, and production continues as usual.
OVL also possesses a 20 per cent stake in the Sakhalin-1 oil and gas field in the Far East of Russia. In 2009, OVL acquired Imperial Energy, which holds fields in Siberia, for $2.1 billion.
While OVL has 32 oil and gas properties across 15 countries, its oil production fell to 6.349 million tonnes in the 2022-23 fiscal year from 8.099 million tonnes in the previous year. Similarly, gas output declined to 3
