Indian firms await Russian nod on bid to acquire stakes
2 min read 24 Aug 2022, 12:36 AM ISTRussia is looking to buy and resell stakes of Western firms in sanctions-hit oil and gas assets

NEW DELHI : Russia hasn’t been amenable to overtures by Indian state-run firms in acquiring the stakes of Western energy majors in Russian oil and gas assets after their exit from the sanctions-hit nation, said a top Indian government official aware of ongoing deliberations.
This comes against the backdrop of the Russian government looking at taking over the stakes of withdrawing Western firms such as ExxonMobil and BP, and then selling them at a premium.
Indian state-owned firms such as ONGC Videsh Ltd (OVL), Bharat Petroresources Ltd, Indian Oil Corp (IOC) and Oil India Ltd (OIL) have invested $16 billion in Russia till date, including in the Far East and East Siberia, in oil and gas assets such as Sakhalin-1, Vankor and Taas-Yuryakh.
OVL owns a 20% stake in the Sakhalin-1 hydrocarbon block in which ExxonMobil is the operator. While OVL, Oil India, IOC and Bharat Petroresources own 49.9% in Rosneft’s subsidiary JSC Vankorneft, another consortium of OIL, IOC and Bharat Petroresources owns 29.9% of Taas-Yuryakh Neftegazodobycha. OVL has also acquired the Siberian deposits of the UK’s Imperial Energy Corp.
A spokesperson for Russia’s Rosneft in an emailed response said, “On 15 May, the operator of Sakhalin-1 made a decision to halt production. At present, technological process is being maintained and no oil shipment is taking place at the project. Rosneft looks forward to resolving the situation legally and restoring the Sakhalin-1 project’s production activities involving all existing shareholders."
A consortium of OVL, IOC and Oil India Ltd is looking to invest jointly in Rosneft’s massive Vostok project. India has also been looking to invest in Novatek’s Arctic LNG-2 project as part of its energy security playbook. India imports 85% of its oil and 54% of gas requirements.
“One of the promising areas of cooperation between the company and its Indian partners may be the Vostok il project, which is the largest greenfield oil and gas project in the world. Rosneft is open to see new partners entering the Vostok Oil project, including those coming from India who are now taking part in relevant negotiations," the Rosneft spokesperson said.
While an Oil India Ltd spokesperson declined comment, a Novatek spokesperson asked Mint to direct queries to Indian firms.
Queries mailed to the spokespersons of India’s ministry of petroleum and natural gas, the Russian Embassy in New Delhi, GAIL (India) Ltd, Petronet LNG Ltd (PLL), IOC, Bharat Petroleum Corp. Ltd (BPCL), Hindustan Petroleum Corp. Ltd (HPCL), OVL, BP and ExxonMobil on 18 August remained unanswered till press time. “India is one of Russia’s key strategic partners. Rosneft backs the efforts of both leaders of our countries, President Vladimir Putin and Prime Minister Narendra Modi, to significantly increase mutual investments ensuring the stable trade and economic cooperation between Russia and India," the Rosneft spokesperson said.
“Cumulative payments to Indian partners and the dividends from joint projects amounted to about $5 billion over the past four years," the spokesperson added.
Indian state-run firms have been trying to leverage this opportunity to acquire equity energy at a time when energy prices have become very unpredictable in the wake of Ukraine war. Mint earlier reported about India exploring a plan that involves participatory commitments by its state-run energy firms in international LNG contracts available after five years, in lieu of securing supplies in the immediate term.
“The efforts are still on. We are hopeful that our firms are successful," said the top Indian government official cited above.