ONGC Eyes Future Share of Russian Crude Amid Transport Challenges

20 Sep 2023 , 10:31 AM

ONGC (Oil and Natural Gas Corp), a state-run Indian company, aims to receive a share of crude from a Russian project it partly owns in the future Challenges in shipping Russian oil prompt ONGC to patiently await better conditions for transportation.

ONGC Videsh, the overseas investment arm of ONGC, has regained a 20% stake in the Sakhalin-1 oil and gas project after a change in project operator. Discussions with the Russian government and project shareholders are underway to resume oil uptake through a production-sharing arrangement.

Sanctions on Russian oil by Western governments due to the Ukraine conflict make it difficult to secure shipping and insurance for Russian oil. The talks with Russia and project shareholders may take up to six months to reach a conclusion.

Sakhalin-1 project produces approximately 200,000 barrels of oil per day, with various shareholders including Sodeco (Japan) and Rosneft (Russia). ONGC, India’s primary explorer, has investments in three Russian projects but currently isn’t seeking further investments in Russia due to market uncertainties resulting from the Russia-Ukraine war. India, heavily reliant on imports for oil and gas, experiences a decline in crude oil imports for three consecutive months as refiners reduce shipments from Russia.

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