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19 Oct, 2022 05:30

India eyes bigger stake in Russian oilfields – Reuters

New Delhi reportedly plans to preserve and expand its holdings in the massive Sakhalin-1 project
India eyes bigger stake in Russian oilfields – Reuters

India’s Oil and Natural Gas Corporation (ONGC) is considering increasing its stake in the new Russian entity that will manage the Sakhalin-1 energy project in the country’s Far East, Reuters reported on Tuesday. Sources told the media outlet that the company plans to retain its 20% share in the asset.

“ONGC Videsh will protect its share in the project, which means it will take a stake in the new entity,” one of the unnamed sources said.

According to them, ONGC will also consider taking an additional stake in Sakhalin-1 if it makes “commercial sense.”

ONGC holds a stake in the project through its overseas investment arm, ONGC Videsh. According to Reuters, the Sakhalin-1 project accounted for about a quarter of the Indian company’s reserves of 124.7 million tons in the year ending March 31, 2022.

The report comes after Russian President Vladimir Putin signed a decree earlier this month to establish a new operator for the project that will take over the rights and responsibilities of Sakhalin-1. The decree effectively prevents investors from ‘unfriendly states’ from selling their shares in certain strategic enterprises, including the Sakhalin ventures.

On Monday, US oil major ExxonMobil announced it has fully exited Russia after Moscow “unilaterally terminated” its interests in the Sakhalin-1 project.

Meanwhile, a consortium of Japanese firms, SODECO, which also holds a stake in the venture, said it was still gathering information about the decree.

“We … plan to make a decision by November 12 whether or not we will apply for a stake in the new entity after consulting with our stakeholders, including the Japanese industry ministry,” a spokesperson at SODECO was quoted as saying on Monday.

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