An official said on Monday that the international branch of Oil and Natural Gas (ONGC), ONGC Videsh Ltd, had repurchased a 20% share in the Sakhalin-1 oil and gas reserves in Russia’s far east.
Exxon Neftegaz, a regional affiliate of the US energy giant ExxonMobil, was terminated as the Sakhalin-1 project’s operator by Russian President Vladimir Putin in October of last year. All of the project’s assets and equipment were then handed to a new operator.
The other former foreign investors in the project, the Japanese Sodeco consortium and ONGC Videsh, were requested to submit an application to the Russian government in order to reclaim their shareholdings. According to the official, OVL requested the same stake it had before and was granted it.
After Exxon Neftegaz declared force majeure at the project in reaction to international sanctions placed on Russia following its invasion of Ukraine, production from Sakhalin-1 ceased in April 2022.
The Sakhalin-1 project and operatorship were given by Moscow to a regional Rosneft affiliate, a Russian oil company. ExxonMobil, Sodeco, and ONGC Videsh, the project’s foreign shareholders, were then requested by Russia to submit applications to re-establish their shareholdings in the project by mid-November.
Sakhalin-1 was producing 220,000 barrels per day of oil before the Ukraine war. Of this, OVL’s share was 44,000 bpd or 2.2 million tonne per annum. However, western sanctions following the Russia-Ukraine war led to constraints in evacuating oil.