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April 29, 2022

India calls on state firms to consider acquiring stakes in Russian assets

The state-run energy companies may buy stakes in Russia’s Rosneft from European oil major BP.

Understand the impact of the Ukraine conflict from a cross-sector perspective with the Global Data Executive Briefing: Ukraine Conflict


The Indian Government has urged state-run energy companies to consider acquiring a stake in sanctions-hit Russian firm Rosneft, reported Reuters, citing two people familiar with the matter.

The state-run energy companies have been urged to assess the possibility of buying the stake from European oil major BP, which is planning to sell its 19.75% interest in the Russian firm.

The Indian Oil Ministry’s intention has been conveyed last week to Indian Oil Corp. (IOC), ONGC Videsh Ltd (OVL), Bharat Petro Resources Ltd (BPRL), Hindustan Pertoleum’s subsidiary Prize Petroleum, GAIL (India), and Oil India Ltd, according to the sources.

The ministry urged Oil and Natural Gas Corp’s (ONGC) overseas investment division OVL to explore purchasing a 30% stake in the Sakhalin 1 project, in Russia’s Far East, from Exxon Mobile.

OVL currently owns a 20% stake in the Sakhalin 1 project, which is operated by Exxon Mobile.

Last month, Exxon said it plans to exit approximately $4bn worth of oil and gas assets and discontinue all its operations in Russia, including the Sakhalin 1 project.

One of the sources said the stakes in the Russian assets would be divested to Indian energy companies at discounted rates, owing to the risk involved with the assets.

The Indian firms are still required to assess the sanctions’ impact on potential investments, with due diligence due to commence, according to a second source.

The source said: “The fear is that this investment could get stuck in Russia as sanctions might bar us from bringing equity oil and gas to India.”

Amid the Russia-Ukraine conflict, Chinese state-owned offshore oil and gas firm CNOOC said it has ‘no concrete plan or action yet’ to take oil and gas assets in Russia that are being abandoned by oil majors, reported Reuters, citing a top company executive.

CNOOC CFO Xie Weizhi was cited by the news agency as saying to reporters: “Currently, the Russia-Ukraine conflict is at a complex stage. We’re monitoring the situation and do not have any concrete plan or action yet.”

Last week, The Telegraph reported that China’s state-run energy companies, including CNOOC, were in discussion with Shell to acquire a stake in a Russian liquefied natural gas project.

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