India’s ONGC Plans To Take A Stake In New Russian Entity 

According to three sources familiar with the matter, India's Oil and Natural Gas Corp (ONGC.NS) plans to acquire a stake in the new Russian entity that will oversee the Sakhalin 1 project in the far east in order to keep a 20% ownership position in the asset.

Earlier this month, Russian President Vladimir Putin signed a decree designating a new operator for the ExxonMobil (XOM.N)-led the project and giving the Kremlin the authority to decide whether international shareholders can keep Sakhalin 1 stakes.

One of the sources stated, "ONGC Videsh will preserve its portion in the project, which means it will acquire a stake in the new business.

Through its overseas investment arm, ONGC Videsh, ONGC holds an interest in the project.

Sakhalin 1 investor rights will be owned by the new Russian entity, which will be run by Sakhalinmorneftegaz-shelf, a Rosneft subsidiary. Foreign investors have one month to determine whether or not to keep their holdings in the project.

After Exxon declared force Majeure in April and refused to accept Russian insurance coverage for the tankers as western insurers withdrew owing to the sanctions, sources claim that Sakhalin 1's output dropped.

Before Russia started its alleged "special military activities" in Ukraine, Sakhalin 1 was producing 220,000 bpd. According to the sources, operatorship of the project by a Russian organisation will secure oil shipment and assure Sakhalin 1's smooth operation.

The largest oil exploration and production company in India is The Oil and Natural Gas Corporation Limited (ONGC). Under the control of the Union Ministry of Petroleum and Natural Gas, it is a state-run company. ONGC also runs onshore and offshore rigs in addition to performing exploratory work on possible oil and natural gas fields. Additionally, it operates oil extraction operations overseas through its subsidiary, ONGC Videsh. Along with operations in other areas in Latin America, Africa, and West Asia, some of the major oil and natural gas fields discovered or run by ONGC include Assam, Cambay, Mumbai High, and the Sakhalin resources in Russia. The Indian government established ONGC in 1955, and it  its headquarter is in Dehradun.