Oil & Gas

India’s ONGC Doubts Russia Takeover of Sakhalin-1 Project

Technicians stand next to a rig at an Oil and Natural Gas Corp (ONGC) plant, in Dhamasna village in Gujarat. ONGC Videsh, the overseas investment arm of state-run ONGC, has a 20% stake in the project, which was once estimated to contain 17 trillion cubic feet in recoverable gas reserves. File photo: Reuters.

India’s Oil and Natural Gas Corporation (ONGC) doubts that Russia will try to take over the Sakhalin-1 oil and gas project, in which it has a stake.

A senior Russian legislator said on Thursday that Moscow would take control of the Sakhalin-1 oil and gas project in which ExxonMobil and Japan’s SODECO are also partners.

Last week, Russia took over the neighbouring Sakhalin-2 as its Japanese partners exited due to sanctions imposed over Russian aggression in Ukraine.

“I hope it would not impact us … our relation is too strong and it has been for too long,” ONGC boss Alka Mittal said.

ONGC Videsh, the overseas investment arm of state-run ONGC, has a 20% stake in the project, which was once estimated to contain 17.1 trillion cubic feet in recoverable gas reserves.

There are fears that Moscow will seize upstream oil and gas investments as tensions over its war in Ukraine escalate. India has expressed neutrality over Russia’s invasion of Ukraine.

The Moscow economic newspaper Kommersant said on Thursday that Russian authorities have publicly acknowledged the serious problems the Sakhalin-1 project faces.

It said oil production on it almost stopped after ExxonMobil recalled its technical specialists from Russia.

Kommersant said there were no signs as yet of a Russian takeover.

“The difficulties of Sakhalin-1 are associated, among other things, with the inability to fully operate the equipment after the departure of the foreign partner,” the paper said.

George Russell, with Reuters

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.