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Dividends worth $300 million to $400 million to Indian oil companies for their stakes in Russian oil assets are stuck due to sanctions by the US and the west after Kremlin’s invasion of Ukraine, said a person aware of the matter.
The dividends are due since last year. Talks are underway to resolve the issue, according to the person.
As Russia is out of the SWIFT global payment system, banking channels are not available to disburse the dividends, the person said.
The Indian companies which have stakes in Russian oil and gas projects are ONGC Videsh Ltd, Oil India, Bharat Petroleum Croporation Ltd, Indian Oil Corporation.
On 14 March, Mint reported that these companies have been unable to access around $400 million in dividend payments stuck in Russia.
India has leveraged its “special and privileged strategic partnership” with Russia to acquire stakes in Russian oil and gas projects. OVL, holds a 26% stake in CSJC Vankorneft, the owner of the Vankor Field and North Vankor license. An Indian consortium comprising Indian Oil Corp., OIL, and Bharat Petro Resources also holds a 23.9% stake in the same venture, with Rosneft’s affiliate RN Vankor operating the field with a 50.1% stake.
A consortium of Indian Oil Corp., OIL, and Bharat Petro Resources holds a 29.9% stake in LLC Taas-Yuryakh.
OVL also owns 20% of Sakhalin-1 and acquired Imperial Energy Corp. Plc, which has 10 exploration and production blocks in the Tomsk region of western Siberia.
In March last year, seven major Russian banks were removed from the SWIFT international payments system. SWIFT, jointly owned by thousands of financial entities globally, allows for the smooth and secure movement of international payments across borders.
It was followed by price cap on crude oil Russia that came into effect on 5 December 2022.
