Oil India Limited (OIL), the state-owned oil and gas explorer, has $300 million in dividends from its stakes in Russian oilfields stuck at Russian banks and unable to withdraw, due to last week’s U.S. sanctions that hit the Rosneft-operated fields.
The U.S. sanctions on JSC Vankorneft and Taas-Yuryakh Neftegazodobycha LLC (LLC TYNGD), in each of which Rosneft holds just over 50%, have complicated fund transfers, Oil India’s chairman Ranjit Rath told Reuters on Tuesday.
OIL is seeking legal options to free up the dividends, Rath added.
Last week’s U.S. sanctions on Russia’s top two producers, Rosneft and Lukoil, included sanctions on a number of subsidiaries of the companies, including JSC Vankorneft and TYNGD.
OIL, along with two other Indian state oil companies, IOCL and BPRL, acquired in 2016 a 23.9% participating interest in JSC Vankorneft through a Singapore-based special-purpose vehicle, Vankor India Pte Ltd.
The same Indian companies also bought the same year a 29.9% participating interest in LLC TYNGD through another Singapore-based SPV, Taas India Pte Ltd.
Now the sanctions are complicating the dividend withdrawals for the Indian firms participating in ventures in producing Russian oilfields.
The U.S. sanctions on Russia are complicating India’s supply of crude oil, too.
Indian refiners, which import from Russia about a third of all their crude, are scrambling for alternative supply and clarity in the sanctions set to come into effect on November 21.
India’s Reliance Industries, the top private refiner in the country, is expected to stop importing crude under a long-term deal with the now-sanctioned Russian oil giant Rosneft.
Reliance Industries, one of Rosneft’s biggest clients in India, has turned to the spot market for crude oil deliveries.
India’s refiners have reportedly suspended new orders for Russian crude. The refining industry in Russia’s second-biggest crude buyer after China awaits clarity from the government about navigating the new U.S. sanction context, Reuters reported on Tuesday, citing unnamed sources.
By Charles Kennedy for Oilprice.com
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