India’s state-run Oil and Natural Gas Corp (ONGC) said that oil output from the Sakhalin-1 project in Russia has returned to a plateau level of 190,000 - 200,000 barrels per day (bpd) from zero. Sakhalin-1 produced an average of 227,000 bpd in 2021.

Following the onset of sanctions against Russia due to the war in Ukraine, Russia seized the Sakahlin-1 asset and ExxonMobil, the operator, exited Russia.

ONGC, through ONGC Videsh Ltd (OVL), its overseas investment arm, holds a 20% stake in the project. In April 2023, Russia’s Rosneft offered dividend payments to OVL against its 20% stake, rather than equity oil.

ONGC hopes to reclaim its 20% stake in the project in the coming months after some terms and conditions are fulfilled, according to Rajarshi Gupta, managing director of OVL.

In March 2023, Igor Sechin, CEO of Rosneft Oil Company, made a working trip to India, during which he met with officials from the Indian government, as well as with the heads of some of the country’s largest oil and gas companies.

During the trip, Rosneft Oil Company and Indian Oil Company signed a term agreement to increase oil supplies substantially as well diversify the grades to India. The parties also discussed ways of expanding cooperation between Rosneft Oil Company and Indian companies in the entire value chain of the energy sector, including possibilities of making payments in national currencies.

Particular attention was paid to the ongoing implementation of joint projects between Rosneft and its Indian partners, including Sakhalin-1, Taas-Yuryakh and Vankorneft.

The parties also noted a significant increase in turnover between Russia and India. According to the latest statistics from the Ministry of Commerce and Industry of India, Russia for the first time in history has become one of the five largest trading partners of India—the volume of trade between the countries in 2022 reached 38.4 billion dollars.

Gupta said that OVL is “not in a hurry” to retrieve its less than US$100 million pending dividend from Sakhalin-1 and could consider reinvesting it in the project.

Indian companies (OVL, Oil India Limited, Indian Oil Corporation, and Bharat Petroresources) also have been owners of 49.9% of the Rosneft’s subsidiary JSC Vankorneft since 2016. This company is located in Krasnoyarsk Territory and develops the Vankorskoye oil and gas condensate field, one of the biggest fields discovered and brought on stream over the last 25 years in Russia.

A consortium of Indian companies (Oil India Limited, Indian Oil Corporation and Bharat Petroresources) also owns 29.9% of Taas-Yuryakh Neftegazodobycha, which develops the Central Block and the Kurungsky license block of the Srednebotuobinskoye field which is among Rosneft’s largest assets in Eastern Siberia.