Dividends Payable to Indian Oil Companies Stuck in Indian Bank in Russia: Report

New Delhi: Hundreds of millions of dollars of dividends payable to Indian oil companies from their investments in Russian oil and gas projects are stuck in an Indian bank in Russia, the Indian Express reported.

Oil India’s (OIL) chairman and managing director Ranjit Rath told the newspaper that the money was parked in bank accounts in Russia and the companies are earning interest on it, but getting it to India remains a challenge.

The money is understood to be parked in the Commercial Indo Bank (CIBL) – which used to be a joint-venture of the State Bank of India and Canara Bank, but the latter recently sold its stake in the venture to SBI, the report said.

The oil companies whose dividends are stuck in Russia are ONGC Videsh (OVL), OIL, Indian Oil Corporation (IOC) and Bharat PetroResources (BPRL). According to the newspaper, the dividends are stuck due to payment channel-related issues in the aftermath of Russia’s February 2022 invasion of Ukraine.

These companies hold stakes in various Russian oil and gas field projects such as Sakhalin-1, Vankor and Taas-Yuryakh.

OVL, the overseas investment arm of Oil and Natural Gas Corporation (ONGC), holds 20% stake in the Sakhalin-1 and 26% in Vankor. These are oil and gas fields in Russia. The consortium of IOC, OIL, and Bharat Petroleum Corporation’s upstream arm BPRL has 23.9% share in Vankor and 29.9% in Taas-Yuryakh.

Around $300 million in dividends belonging to the consortium of IOC, OIL, and BPRL are parked in CIBL, a senior official with one of the companies told the daily. Dividends belonging to OVL are also piling up, the report added.

In April, a top government official had told the daily that dividends stuck in Russia totalled around $400 million.

The official had said that both the nations have been discussing the issue on a regular basis and efforts are on from both sides to resolve it.