ONGC to get dividend instead of oil from Russia's Sakhalin-1 field

10 May 2023 , 01:56 AM

As per various reports, ONGC will get dividend from Russia’s Sakhalin-1 field instead of its share of oil.

ONGC, which has a 20% participating interest in Sakhalin-1, used to get a proportionate share of oil from the field, which it could sell to anyone post the beginning of Ukraine war last year. But, later the field was sold to new Russian company to operate the field, which had stopped production for several months. It’s now producing at near-normal levels of about 200,000 barrels per day, according to the people cited.

This will be going to change the cash flows with respect to the project for ONGC. Dividends may come only once or twice a year. Since the beginning of the war, it’s been hard for Indian state firms to repatriate dividends from a few other Russian oil and gas fields as Western sanctions have restricted cross-border money transfers.

The oil from Sakhalin-1, known as the Sokol blend, has traded above the Western price cap of $60 per barrel, imposed on Russian oil, by Western countries.