State-run ONGC’s overseas arm, ONGC Videsh (OVL) has retaken its 20 per cent stake in the oil and gas fields at Sakhalin-I in Russia’s Far East. The production at the blocks resumed last year in December, sources said.

Production at Sakhalin-I stopped last year after its operator ENL, a subsidiary of Exxon Mobil, declared force majeure following international sanctions slapped on Russia.

“OVL has retaken its stake at Sakhalin. The production there also started last year in December. The supply from the fields do not seem to be a problem at present as Russian authorities say there are multiple options for insurance, including sovereign guarantees, and crude oil is being delivered through Russian hag vessels and the same thing would be applicable for Sakhalin,” an official source said.

Following the Ukraine conflict, the International Group of Protection & Indemnity (IG P&I), an international insurance club for all seaborne vessels especially crude oil vessels, stopped providing insurance due to which the vessels could not sail and subsequently production also came to a halt.

In October 2022, Russia issued a decree transferring the assets of Sakhalin to a Rosneft-owned entity under a holding structure and an option was given to all the foreign participatory interest holders, including Japan and India, to exercise their rights.

OVL had exercised its right to retake its share. It was also discussed during the official visit of External Affairs Minister S Jaishankar to Russia in November 2022. Before the sanctions, Sakhalin used to produce around 2 million tonnes (mt) of crude oil annually, of which OVL’s share was around 40,000 net barrels of oil and oil equivalent of gas.

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