India asks state oil majors to dump sanctioned Russian assets: report

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Indian companies are hoping to secure stakes in Russian assets, according to the report.

New Delhi:

India has asked state energy companies to assess the possibility of buying European oil giant BP’s stake in sanctioned Russian company Rosneft, two people familiar with the matter said.

BP has announced that it is giving up its 19.75% stake in Rosneft.

The Ministry of Petroleum last week announced its intention to ONGC Videsh Ltd (OVL), Indian Oil Corp., Bharat Petro Resources Ltd (BPRL), Prize Petroleum Ltd, a subsidiary of Hindustan Pertoleum, Oil India Ltd and GAIL ( India) Ltd, the sources said.

Indian companies and the oil ministry did not respond to Reuters emails seeking comment.

While Western nations have imposed sanctions on Russia for the war in Ukraine, India has not explicitly condemned Moscow’s actions there.

The world’s third-largest oil importer and consumer, India imports around 85% of its 5 million barrels per day (bpd) of oil needs.

The call for Indian companies to consider buying the stake in Rosneft came after BP CEO Bernard Looney met Indian Oil Minister Hardeep Singh Puri in March.

BP declined to comment.

The Oil Ministry has also asked OVL, the overseas investment arm of Oil and Natural Gas Corp, to consider buying out Exxon Mobile Corp’s 30% stake in the Sakhalin 1 project in the Far Russian East. Exxon is the operator of the project.

OVL already holds a 20% stake in the project.

Exxon announced on March 1 that it would withdraw approximately $4 billion in assets and cease all operations in Russia, including Sakhalin 1.

OVL also holds 26% of the capital of Vankorneft, owner of the Venkor field in the Western Siberian basin.

Separately, a consortium comprising Oil India, IOC and BPRL, the exploration arm of state refiner Bharat Petroleum Corp, holds a 23.9% stake in Vankorneft and a 29.9% in Taas-Yuryakh in Eastern Siberia.

One of the sources said Indian companies were hoping to secure stakes in Russian assets at discounted rates given the risk involved, calling the potential deals “distress sales”.

A second source said Indian companies must study the impact of sanctions on potential investments and yet begin a due diligence process.

“The fear is that this investment will remain blocked in Russia because the sanctions could prevent us from bringing oil and gas to India.”

“Our effort has been to see how we can stabilize economic transactions, economic engagements with Russia in the current context… There are of course constraints, there are sanctions from certain countries, and we will have to somehow work through this,” Indian Foreign Ministry spokesman Arindam Bagchi said at a press conference.

Exxon said Wednesday that its Russian unit Exxon Neftegas Ltd has declared force majeure for its Sakhalin-1 operations due to sanctions imposed on Russia that have made it increasingly difficult to ship crude to customers.


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