ONGC Videsh seeks banking route to recover $350 mn stuck in Russia

New Delhi: India’s flagship overseas firm ONGC Videsh Ltd (OVL) 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, has about $350 million in dividend income stuck in Russian banks that it can’t repatriate because of western embargo.

The firm has another $600 million stuck in Venezuela due to sanctions. OVL managing director Rajarshi Gupta said about $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 $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, $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.