Sakhalin-I fund: OVL seems to be to switch $600 million in roubles

NEW DELHI: ONGC Videsh (OVL) is transferring to switch about $600 million in roubles to Russia as its contribution in ‘abandonment fund’ for securing deserted wells within the Sakhalin-I oil venture, assembly a situation for registering its 20% stake with the brand new operator appointed by Moscow after ExxonMobil’s exit in 2022.”We expect to make the transfer in a month or two.Rouble payment is the most viable option due to Western sanctions and banking restrictions on Russia as well as Moscow’s counter-sanctions. We can buy rouble and also use dividend of more than 16 billion roubles from Vankorneft project stuck in Russia,” an individual conscious of the discussions stated.OVL acquired its share of the abandonment fund, final estimated at $2 billion, from foreign-party administrator JP Morgan on April 6, 2023 however couldn’t switch it to Russia attributable to banking challenges. Transferring the fund was a key situation for formalising ONGC Videsh’s stake within the venture beneath the brand new entity fashioned after ExxonMobil’s exit.Moscow had seized the Sakhalin-I venture in Oct 2022 after ExxonMobil’s exit attributable to Western sanctions, following Russia’s invasion of Ukraine in Feb that 12 months. The rights of buyers within the enterprise had been transferred to Rosneft subsidiary Sakhalinmaorneftegaz-shelf and corporations had been requested to use for fairness afresh. ONGC Videsh’s stake was restored in Dec 2022 conditionally. The abandonment fund is constructed with income contribution in proportion to fairness held by every member of the consortium.

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