8 bn rubles of Indian oil firms stuck in Russia

As much as 8 billion rubles (about Rs 1,000 crore) of dividend income belonging to Indian oil firms is stuck in Russia after the Putin administration clamped down on dollar repatriation, officials said on Friday. Indian state oil firms have invested USD 5.46 billion in buying stakes in four different assets in Russia. These include a 49.9 per cent stake in Vankorneft oil and gas field and another 29.9 per cent in TAAS-Yuryakh Neftegazodobycha fields. They get dividends on profits made by the operating consortium from selling oil and gas produced from the fields.

"We had been regularly getting our dividend income from the projects but since the war in Ukraine led to volatility in foreign exchange rates, the Russian government has put restrictions on repatriation of dollars from that country," said Harish Madhav, Director (Finance), Oil India Ltd, which is one of the partners in the fields.

The dividend from TAAS was paid on a quarterly basis while Vankorneft's earnings were paid half-yearly.


"About 8 billion rubles of dividend income belonging to the Indian consortium is left (in Russia)," he said. "It is not a very large sum of money."

All dividend income prior to the Ukraine war was repatriated but the one that accrued after that is stuck, he said, adding the situation was not alarming and the Indian firms are confident of getting the money once the conflict ends.

ONGC Videsh Ltd (OVL), the overseas arm of state-owned Oil and Natural Gas Corporation (ONGC), holds 26 per cent stake in Suzunskoye, Tagulskoye and Lodochnoye fields -- collectively known as the Vankor cluster in the north-eastern part of the West Siberia.

Indian Oil Corp (IOC), Oil India Ltd (OIL) and Bharat PetroResources Ltd (a unit of Bharat Petroleum Corp Ltd or BPCL) hold another 23.9 per cent. Russia's Rosneft is the operator with 50.1 per cent interest.

The consortium of OIL, IOC, and Bharat PetroResources has a 29.9 per cent stake in TAAS-Yuryakh Neftegazodobycha.

The operations of the fields have not been impacted and they continue to produce as normal.

OIL Chairman and Managing Director S C Mishra said the company's investments have not been impacted by the Russia-Ukraine war.

Asked if OIL is in discussion with any of the foreign companies exiting Russia because of its invasion of Ukraine, Madhav said, "We are not. OVL or others may be talking but nothing has reached us. We don't know."

OVL also has a 20 per cent stake in the Sakhalin-1 oil and gas field in Far East Russia, and in 2009 acquired Imperial Energy, which has fields in Siberia, for USD 2.1 billion.