Two people familiar with the matter said India has asked state-run energy companies to evaluate the possibility of buying European oil major BP’s stake in sanctions-hit Russian firm Rosneft.
BP has announced that it is giving up its 19.75% stake in Rosneft.
Sources said the oil ministry last week decided to terminate ONGC Videsh Ltd (OVL), Indian Oil Corp, Bharat Petro Resources Ltd (BPRL), Hindustan Petroleum subsidiary Prize Petroleum Ltd, Oil India Ltd and GAIL (India) Ltd with its intention. Make aware.
Indian companies and the oil ministry did not respond to emails from Reuters seeking comment.
While Western countries have imposed sanctions against Russia over the war in Ukraine, India has not explicitly condemned Moscow’s actions there.
The world’s third largest oil importer and consumer, India imports about 85% of its 5 million barrels per day (bpd) oil needs.
In March, BP CEO Bernard Looney called on Indian companies to explore buying a stake in Rosneft after meeting Indian Oil Minister Hardeep Singh Puri.
BP declined to comment.
The oil ministry also asked Oil and Natural Gas Corp’s foreign investment arm OVL to consider buying Exxon Mobile Corp’s 30% stake in the Sakhalin 1 project in Russia’s Far East. Exxon is the driver of the project.
OVL already holds 20% stake in the project.
Exxon said on March 1 it would pull out about $4 billion in assets and shut down its all-Russia operations, including Sakhalin 1.
OVL also holds a 26% stake in Vankorneft, owner of Vankor Field in the West Siberian Basin.
Separately, Oil India, a consortium of IOC and BPRL, the exploration arm of state refiner Bharat Petroleum Corp, holds a 23.9% stake in Vankorneft and a 29.9% stake in Tas-Yuryakh in Eastern Siberia.
One of the sources said Indian companies are expected to get stake in Russian assets at discounted rates, given the risk involved, terming the potential transaction a “crisis sale”.
A second source said Indian companies need to study the impact of restrictions on potential investments and start due diligence as of now.
“The fear is that this investment may get stuck in Russia as sanctions may prevent us from bringing equity oil and gas to India.”
“Our effort has been to see how we can stabilize economic transactions, economic engagement with Russia in the current context… There are certainly constraints, there are sanctions by some countries, and we have to work through that. ” India’s Ministry of External Affairs spokesperson Arindam Bagchi told a press conference.
Exxon said on Wednesday that its Russian arm Exxon Neftegas Ltd has announced a force majeure shutdown of its Sakhalin-1 operations due to sanctions on Russia that have made it difficult to supply crude to customers.
This story has been published without modification in text from a wire agency feed.