ONGC retains 20% stake in Russia’s Sakhalin-1

(Representative image)

Oil and Natural Gas Corporation (ONGC) has received approval from Russia to retain a 20 percent stake in the Sakhalin-1 oil and gas fields in the far east region of the country, said Rajarshi Gupta, Managing Director of ONGC Videsh.

“We have received the approval and are back with a 20 percent stake in Russia’s Shakalin-1,” said Gupta.

Last month, Russia had asked foreign shareholders in the project to apply for regaining their shares after Exxon Neftegaz, the Russian unit of Exxon Mobil Corp, declared force majeure on the project. The US giant, which had a 30 percent stake in Sakhalin-1, said it would not invest in the project to comply with sanctions imposed on Moscow.

Russian President Vladimir Putin signed a decree to set up a new operator for the Sakhalin-1 oil and gas project. According to the decree, the Russian company would own the investors' rights, including the operator's rights of Exxon Neftegaz.

ONGC’s overseas investment arm, ONGC Videsh has 20 percent shares in the project while Japan's Sodeco consortium—which has also decided to retain its shares—has a 30 percent stake.

Russian oil producer Rosneft holds a 20 percent stake in the project through its subsidiaries.

The output of Sakhalin-1 had fallen after Exxon declared force majeure. Sakhalin-1 was producing 220,000 barrels per day before Russia’s invasion of Ukraine.