Without Sakhalin-1 stake’ equity rights, OVL losing out on dividends
New Delhi: With state run ONGC Videsh Ltd (OVL) yet to get the equity rights for its shares in Sakhalin-1, the overseas arm of Oil and Natural Gas Corporation (ONGC) has not received any dividend payments, said two people aware of the development. The issue of India’s most lucrative energy equity buy overseas has been raised with Rosneft and at various levels in the Russian government but is yet to be resolved. The stake sale was purchased ONGC’s subsidiary for $331 million in 2001 that has yielded manifold returns.
Rosneft on its part has invested around $13 billion in India. Mint reported on 21 April about Russia’s Rosneft offering dividend payments to OVL as against its 20% stake in Sakhalin-1, which was earlier the source of lucrative equity oil for India. Following Russia’s invasion of Ukraine, Moscow seized the Sakhalin-1 asset through a presidential decree in October last year and gave it to Rosneft subsidiary —Sakhalinmorneftegaz-shelf— resulting in ExxonMobil, the operator of the asset exiting Russia.
ExxonMobil owned a 30% stake in the asset spread over 1140 square km, Japan’s Sakhalin Oil and Gas Development Co. held 30% in the project, with Rosneft units holding the remaining 20%. Post the Russian presidential decree, while OVL received its previous shareholding in Sakhalin-1, the shares are yet to be transferred to it.
In the absence of share’ ownership, OVL is not getting the dividend. “While we earlier used to get equity oil for our stake in Sakhalin-1, we were offered dividends. Given that our share has not been transferred back to us, presently we are neither getting dividend, nor any equity energy from there," said one of the two people cited above requesting anonymity.
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