ONGC Videsh eyes banking channel breakthrough to recover USD 350 mn stuck in Russia

New Delhi: India's flagship overseas firm ONGC Videsh is hopeful that the opening of banking channels with Russia and a sanctions waiver on Venezuelan oil will allow it to recover pending dues in both countries, a senior official said on Friday.

OVL, the overseas investment arm of state-owned Oil and Natural Gas Corporation (ONGC), has about USD 350 million in dividend income stuck in Russian banks that it can't repatriate because of western embargo.

The firm has another USD 600 million stuck in Venezuela due to sanctions.

OVL managing director Rajarshi Gupta said about USD 350 million in dividend income from the company's interest in oil and gas assets in Russia is lying in the company's bank account in Russia.

"We believe resolution will happen soon and we should be able to get the money soon," he said.

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 the Vankorneft oil and gas field and another 29.9 per cent in the TAAS-Yuryakh Neftegazodobycha fields.

They get dividends on profits made by the operating consortium from selling oil and gas produced from the fields. Soon after invading Ukraine in February 2022, Russia put restrictions on repatriation of dollars to check volatility in foreign exchange rates.

OVL got its last dividend back in July 2022 and subsequent dividend payout is lying in the company's account in Russia.

He said the assets are operating without any problem and considering the operating and capital expenditure that the company may have on the Russian assets, USD 350 million is not much.

OVL holds interest in Russia through a Singapore subsidiary.

Moscow declared Singapore as an unfriendly nation last year and so money from Russia cannot flow to any company incorporated in that country.

He said the company is looking at right banking channels and discussions are on.

OVL holds a 26 per cent stake in Suzunskoye, Tagulskoye and Lodochnoye fields -- collectively known as the Vankor cluster in the north-eastern part of 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 in Vankor. Russia's Rosneft is the operator with 50.1 per cent interest.

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.

Gupta said the company has also sought sanctions waiver to get past dues from Venezuela.

OVL holds a 40 per cent stake in the San Cristobal field in eastern Venezuela's Orinoco Heavy Oil belt, while Venezuela's state oil company, PDVSA, holds the remainder.

ONGC chairman and managing director Arun Kumar Singh said his group will continue to buy Russian oil till such time that it is available at economical prices and it makes commercial sense for refineries to process it.

The company has two refining subsidiaries, Mangalore Refinery and Petrochemicals Ltd (MRPL) and Hindustan Petroleum Corporation Ltd (HPCL), both of which have bought Russian oil that was available at a discount since the start of the Ukraine war.

"There are no sanctions on Russian oil (purchase). Unless the government of India decides otherwise, we will buy every drop of oil that comes into the market provided it is economically viable and it fits into the refinery configuration," he said.