Indian Oil Giant Reportedly Eyes Stake In New Russian Entity That Manages Sakhalin 1 Project

India's Oil and Natural Gas Corporation is reportedly eyeing a stake in the new Russian entity that will manage the Sakhalin 1 project as it looks to maintain a 20% share in the asset.

What Happened: Russian President Vladimir Putin had issued a decree to establish a new operator for the ExxonMobil Corp XOM-led project.

ONGC holds a stake in the project via its overseas investment arm ONGC Videsh. “ONGC Videsh will protect its share in the project, which means it will take a stake in the new entity," a source told Reuters.

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The Sakhalin 1 project has turned out to be a money maker for ONGC Videsh, as it accounted for about a quarter of its proved reserves of 124.7 million tonnes in the year ended March 31, 2022, the report said.

A consortium of Japanese firms Sakhalin Oil and Gas Development Co (SODECO) holds a 30% stake in the project and Russian oil major Rosneft through Sakhalinmorneftegaz-shelf and RN Astra owns a 20% share, according to the report.

Exxon has reportedly said it left Russia completely after Putin expropriated its properties. The move follows seven months of discussions over an orderly transfer of its 30% stake in a major oil project.

In March, it said that the company is beginning the process to discontinue operations and developing steps to exit the Sakhalin-1 venture, adding that it will not invest in new developments in Russia.

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