India's OVL retakes 20% stake in Sakhalin-1: Press
ONGC Videsh (OVL), the overseas arm of Indian state-owned energy company ONGC, has retaken a 20% stake in the Sakhalin-1 oil and gas fields in Russia, Press Trust of India reported on January 9 citing an official.
Russian president Vladimir Putin late last year issued a decree to establish a new operator for the project, which was previously operated by US major ExxonMobil. Sakhalin-1 is one of the oldest and most successful international oil and gas ventures in Russia. ExxonMobil signed a production-sharing agreement for the project with Russia's state-owned Rosneft in 1995.
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Post ExxonMobil’s exit the Russian government had to decide whether foreign shareholders could retain stakes in Sakhalin-1.
Apart from OVL, the other former foreign shareholder in the project is Japan's Sodeco consortium. Both were asked to apply to the Russian government to regain their shareholdings in the project. OVL acquired a 20% stake in the project in July 2001.
OVL applied and has been given the same shareholding as it had previously, the official told Press Trust. The Sodeco consortium too has retained its stake but there is no clarity on what will happen to ExxonMobil's stake.
Sakhalin-1 was producing 220,000 barrels/day of oil before the Ukraine war. Of this, OVL's share was 44,000 b/d.
Production, which was constrained due to the war, resumed in November and has reached 140,000-150,000 b/d, the official said adding the output is likely to restore to original levels by March end.
This new company has OVL and Rosneft with 20% stake each and Sodeco with another 30%, the official said adding Russia hasn't decided what it will do with the 20% of ExxonMobil.
The partners currently are discussing a joint operatorship model for the fields, Press Trust reported.