New Delhi: Since the beginning of the Ukraine war, oil PSUs like Indian Oil, ONGC Videsh, Oil India and Bharat Petroleum Corporation Ltd (BPCL) have not been able to repatriate dividends from oil and gas projects in Russia where they have a participating interest, said a petroleum ministry official. At least $300-400 million in dividends is stuck since Russia’s invasion of Ukraine as payment channels are unavailable due to sanctions imposed by the western nations, said the official.
Oil PSUs have investments in multiple oil and gas projects in Russia from which they earn dividends periodically.
While payments for oil purchases from Russia are not under sanctions, payments linked to oil and gas assets in the country are, said the official. Oil companies are considering using these dividends to offset their purchase of Russian oil, however, no decision has been made as yet, the official said.
The official added that oil PSUs are facing any problem in making payments for Russian oil. He said that India is still able to avail Russian crude at substantially discounted prices, despite China opening up and increasing its oil imports from Russia.
Oil prices are likely to remain extremely volatile in the months to come as uncertainties surround the weak growth in the developed world and demand expansion in China, said the official. Crude oil has fallen to USD 80 a barrel, the same level as it was a month ago.