The over $600 million in dividend income that Indian oil corporations have stashed in Russia may be used to purchase oil from Russia. Indian Oil Corporation (IOC), a division of Bharat Petroleum Corporation Ltd, Oil India Ltd, and ONGC Videsh Ltd, India's main four oil producers, have not been allowed to repatriate dividend revenue from their interests in Russian oil and gas fields. Due to the Western sanctions enacted in response to Moscow's invasion of Ukraine, the money was resting in their Russian bank accounts but could not be transferred to India. At the moment, Russia has replaced Saudi Arabia as India's biggest crude oil supplier, accounting for more than a third of all imports made by New Delhi from overseas. One of the solutions may be to lend the money that is now in Russian bank accounts to organizations that are purchasing oil. They might pay back the debt in India. IOC and BPCL are among the companies that purchase oil from Russia.
"We are studying legal and financial implications of such a move," an official said. 'We are mindful of the sanctions and do not want to do anything that may in any way attract any breach.' Indian state oil firms have invested USD 5.46 billion in buying stakes in four different assets in Russia. These include a 49.9 percent stake in the Vankorneft oil and gas field and another 29.9 percent in the TAAS-Yuryakh Neftegazodobycha fields. They get dividends on profits made by the operating consortium from selling oil and gas produced from the fields. Soon after Russia's invasion of Ukraine in February last year, several major Russian banks were banned from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) financial transaction processing system, constricting Moscow's ability to access the global payments system. Also, the Russian government has put restrictions on the repatriation of dollars from that country to check volatility in foreign exchange rates.
This led to a situation of dividend money getting stranded in Russia. ONGC Videsh Ltd (OVL), the overseas arm of state-owned Oil and Natural Gas Corporation (ONGC), holds a 26 percent stake in Suzunskoye, Tagulskoye and Lodochnoye fields collectively known as the Vankor cluster in the north-eastern part of the West Siberia. Indian Oil Corp (IOC), Oil India Ltd (OIL), and Bharat PetroResources Ltd (a unit of Bharat Petroleum Corp Ltd or BPCL) hold another 23.9 percent in the same project. Russia's Rosneft is the operator with 50.1 percent interest. The consortium of OIL, IOC and Bharat PetroResources has a 29.9 percent stake in TAAS-Yuryakh Neftegazodobycha.