$300 mn of Indian oil cos stuck in Russia

New Delhi: As much as $300 million (about Rs 2,500 crore) of dividend income belonging to Indian oil firms is stuck in Russia due to tough Western sanctions following Moscow’s invasion of Ukraine, a top official said on Thursday.

Indian state oil firms have invested $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.

“We had been regularly getting our dividend income from the projects, and they are lying in bank accounts in Russia,” Oil India Ltd chairman and managing director Ranjit Rath told reporters here. Soon after Russia’s invasion of Ukraine in February last year, several major Russian banks were banned from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) financial transaction processing system, constricting Moscow’s ability to access the global payments system. Also, the Russian government has put restrictions on the repatriation of dollars from that country to check volatility in foreign exchange rates.

The $300 million dividend income pertains to the consortium of OIL, Indian Oil Corporation (IOC) and Bharat PetroResources Ltd. ONGC Videsh Ltd, which also has a stake in the same projects, would have a similar dividend income. This dividend is lying with the Commercial Indo Bank LLC (CIBL), which was a joint venture of the State Bank of India and Canara Bank. Canara Bank in March sold its 40 per cent stake in CIBL to SBI.

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

The Indian firms are looking at options of how to repatriate the money from Russia, he said.

All dividend income prior to the Ukraine war was repatriated but the one that accrued after that is stuck.

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