ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corporation (ONGC), has submitted an application to Russian authorities to retake a 20 per cent stake in the Sakhalin-1 oil and gas fields in the far east region of the country, the company said.
Russian President Vladimir Putin last month disbanded Exxon Neftegaz – a regional subsidiary of US super major ExxonMobil – as operator of the Sakhalin-1 and transferred the project and all of its assets and equipment to a new operator.
The other former foreign shareholders in the project – Japan’s Sodeco consortium and ONGC Videsh – have to apply to the Russian government to regain their shareholdings in the project.
“ONGC Videsh Board in its meeting held on October 18, 2022, has approved submission of its consent to claim the company’s right in Sakhalin-1,” ONGC said in its notes to a stock exchange filing on July-September quarter earnings.
It “expects retention of its interest in the project and is not expecting any major impact on its rights and obligations due to this transition,” it said.
Moscow has assigned a 20 per cent stake in Sakhalin-1 and operatorship to a regional subsidiary of Russian oil producer Rosneft. Russia has asked foreign shareholders in the project – ExxonMobil, Sodeco and ONGC Videsh – to apply to reinstate their shareholdings in the project before mid-November.
While the Sodeco consortium has decided to retain its stake, ExxonMobil confirmed that it had fully exited Sakhalin-1 after the confiscation of assets and has no plans to operate the project.
Production from Sakhalin-1 stopped in May after Exxon Neftegaz declared force majeure at the project in response to international sanctions imposed on Russia following its invasion of Ukraine in February.