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NEW DELHI : State-run Oil India Ltd (OIL) said it has no immediate plan to invest in Russia, indicating uncertainty on investment in the massive Vostok project of Russia’s PJSC Rosneft Oil Co., which it was eyeing through a consortium.

“OIL’s participation in the Vostok project is not yet confirmed," an OIL spokesperson said in an emailed response to Mint.

A consortium of ONGC Videsh Ltd (OVL), Indian Oil Corp. Ltd (IOC), and OIL was seeking to invest jointly in the massive Vostok project of Rosneft. India has also been looking to invest in Novatek’s Arctic LNG-2 project as part of its energy security efforts.

The development comes at a time when Russia declared war against Ukraine, ignoring the Western economic sanctions.

Vostok is an important part of India’s and Russia’s multi-pronged energy engagement that involves energy sourcing and supplies, upstream investments, and joint collaboration in petrochemicals.

“In view of large commitments in various overseas exploration and production (E&P) projects, OIL has no plan in the near-term scenario to acquire E&P assets in Russia," an OIL spokesperson said in an emailed response to a query from Mint about going ahead with making future investments in Russia.

Indian state-owned firms 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, OIL, IOC and Bharat Petroresources own 49.9% in Vankorneft Subsidiary, while another consortium comprising OIL, IOC and Bharat Petroresources owns 29.9% of Taas-Yuryakh Neftegazodobycha.

“Around 60% of investments in Vankorneft and in Taas Yuriakh have already been received as dividends by OIL. Both these projects are paying dividend regularly," the OIL spokesperson said.

State run OVL owns a 20% stake in the Sakhalin-1 hydrocarbon block and acquired Imperial Energy Corp. Plc’s Siberian deposits.

India is keeping a close watch on the situation unfolding in the wake of the Russian invasion of Ukraine, said two Indian government officials.

Queries emailed to the spokespersons of OVL, IOC, Bharat Petroleum Corporation Ltd and Rosneft on Thursday were not immediately answered.

India, the world’s third-largest oil importer has been leaning on its old energy partner Russia and is eyeing more long-term crude oil contracts through preferential pricing. India signed the first term contract for crude oil sourcing from Russia in February 2020, with IOC and Rosneft inking an agreement for 2 million metric tonnes (mmt) of Urals grade crude.

“We are currently working on your request. We will keep you updated," said an external spokesperson for Rosneft in an emailed response. No response was received till press time.

Apart from drawing the curtains on Russia’s Nord Stream 2 natural gas pipeline, Russian financial firm V.E.B. and Promsvyazbank have also been barred from the US and European countries. Also, the Russian government, its central bank, and sovereign wealth funds have been cut off from US financing.

“There is an immediate impact on international crude oil and LNG prices. With the threat of more economic sanctions, how will Russia sell its energy? While Russian energy supplies to India are low, Russian crude and LNG will be off the market for other nations, leading to a rally in prices," said a senior Indian government official requesting anonymity.

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