The exclusion of Russian banks from the SWIFT payment system as well as sanctions imposed on Russia will hurt the Indian oil companies’ ability to repatriate dividends from Russian oilfields as well as investments in the massive Vostok project, The Economic Times reported citing sources. A depreciation of Russian currency, rouble, is also going to reduce dividends in US dollars for Indian oil firms, the report said.
Major Indian oil companies such as ONGC, Oil India Limited (OIL), Indian Oil Corporation (IOC), and BPCL have invested in Russian energy projects, according to the report.
ONGC, OIL, IOC, and BPCL collectively hold a 49.9 per cent dividend stake in Vankor which is one of the largest oilfields in Russia. Meanwhile, ONGC is an equity oil investor in the Sakhalin-1 oilfield in East Serbia. Notably, ONGC, OIL, and IOC, who have invested in the massive Vostok project, are evaluating their investment in the project, as per the report. The SWIFT ban will also make it harder for Indian oil companies to invest in any new projects.
Several international energy companies such as BP PLC, Shell, ExxonMobil, Equinor, and Total Energies have already suspended operations as Russia continues to invade Ukraine. Over the past one week, oil prices have surged to a seven-year high at $110 per barrel.
