India’s state-run Oil and Natural Gas Corporation has completed payments to the liquidation fund of the Sakhalin-1 project to retain its 20% stake, Russia’s Interfax reported on Feb. 17.
“Our stake in the Sakhalin-1 project is secured, and we are participating in the project. Production and operations are proceeding as usual,” ONGC Chief Financial Officer Vivek Tongaonkar said. “We continue to move forward with the support of the Russian and Indian governments. We have been informed that our equity stake in the company is secured, which is a very positive step, and we will be able to receive part of our delayed dividends.”
When the new operator of the production-sharing agreement (PSA) project was established, equity stakes were immediately allocated only to Russian companies — Sakhalinmorneftegaz-Shelf (11.5%) and RN-Astra (8.5%).
Foreign partners were required to confirm their consent to receive proportional stakes in the new operator. That consent was provided by ONGC (20%) and Japan’s SODECO (30%). U.S. energy major Exxon Mobil, which held a 30% stake, said it was ending its participation in the PSA project and fully exiting Russia.
ONGC faced difficulties formalizing its stake in the new Sakhalin-1 operator because of sanctions imposed on Russian banks and Russia’s countermeasures, Interfax reported. Numerous Western sanctions complicated ONGC Videsh’s ability to transfer funds to Russia in U.S. dollars, while ruble payments require approval from Russian authorities.