ONGC not worried about Western sanctions on Russia

India’s oil and gas bellwether is not particularly worried over the impact of Western sanctions against Russia on its business, a senior company official told Live Mint.

“If it is the UN sanctions then we are bothered. If one country or a group of countries imposes sanctions then we may not give much cognizance to that,” said Dinesh K. Sarraf, chairman and managing director of ONGC told the paper.  “That may not change our commercial position. Our thoughts on the sanctions are very clear.”

Although India has not made any official statements on Western sanctions on Russia, sources have told RIR that New Delhi was not likely to support any sanctions against Moscow at the United Nations General Assembly.

ONGC’s overseas arm ONGC Videsh Ltd (OVL) has had a presence in Russia since 2001 when it purchased a 20 percent stake in the Sakhalin-1 project. Analysts largely agree that the investment in the project in the Russian Far East was one of the country’s best transactions overseas, unlike its 2009 acquisition of Imperial Energy.

OVL had acquired the UK-listed Imperial Energy Corporation Plc for $2.1 billion in January 2009, after Russian anti-trust watchdog, the Federal Anti-Monopoly Service (FAS), cleared the deal in what was to be its first acquisition of a foreign exploration and production company with significant assets. The company invested another about $500 million in the asset. However its all-along falling oil production has seriously impacted India’s efforts to reduce its dependence on the imports of oil and gas.

Russian oil giant Rosneft, which has a cooperation agreement with OVL, offered the Indian company a stake in 10 offshore blocks in the Barents Sea and the Black Sea.  It is believed that OVL is still studying the preliminary data provided by Rosneft for identifying the preferred blocks for participation. The Indian company also explored a second investment in Sakhalin, at the Sakhalin-2 project’s Kirinsky block, but nothing came out of preliminary negotiations.

India’s energy demand is expected to more than double by 2035, from about 700 million tonnes of oil at present to around 1.5 billion tonnes.

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