MOSCOW, 18 Oct — PRIME. India’s Oil and Natural Gas Corp (ONGC) plans to retain a stake in the Russian company now managing the Sakhalin 1 oil and gas project and is considering acquiring an additional stake, Reuters reported, citing sources.
Sakhalin-1 LLC registered in Yuzhno-Sakhalinsk
ONGC has a stake in the project through its overseas investment arm, ONGC Videsh.
“ONGC Videsh will protect its stake in the project, which means it will receive a stake in the new company,” the sources told Reuters. They also noted that ONGC would consider acquiring an additional stake in the project if it made “commercial sense”.
The day before, the American oil and gas company Exxon Mobil Corp confirmed to RIA Novosti its withdrawal from Russia. The former operator of Sakhalin-1, Exxon Neftegaz Limited (a subsidiary of Exxon Mobil), which owns a 30% stake, announced in March its intention to withdraw from the project, and in April it introduced a force majeure regime, as a result of which production oil and gas was first reduced and then completely stopped. Other participants in Sakhalin-1 are Rosneft (20%), Japanese Sodeco (30%) and ONGC (20%).
Therefore, earlier in October, Russian President Vladimir Putin ordered by decree that the government create a new Russian operator of Sakhalin-1, which will receive the rights and obligations of Exxon Neftegaz Limited. The new Sakhalin-1 operator will be managed by the Rosneft structure Sakhalinmorneftegaz-Shelf, at least until all the stakes in the operator are distributed, after which the authority of the structure can be extended.
Reuters also notes that, in turn, Sodeco said that it is still collecting information. “We are gathering information about the decree and plan to decide by November 12 whether we will apply for a stake in the new company after consultation with our stakeholders, including the Japanese Ministry of Industry,” a spokesman for Sodeco said on Monday.
In the meantime, according to the same sources of the agency, production at Sakhalin-1 fell after Exxon declared force majeure in April and refused to accept Russian insurance coverage for tankers, as Western insurers refused insurance due to international sanctions. . The sources also added that the management of the project by the Russian company, in their opinion, will lead to the uninterrupted operation of Sakhalin-1 and ensure the shipment of oil.