Indian oil companies are considering using approximately $600 million of their stranded dividend income in Russia to purchase oil from the country, according to officials. Indian oil enterprises including Indian Oil Corporation (IOC), Oil India Ltd, and ONGC Videsh Ltd have been unable to repatriate their dividend earnings from investments in Russian oil and gas assets due to Western sanctions imposed on Russia. These sanctions were introduced following Moscow’s invasion of Ukraine. Russia is currently the top crude oil supplier to India, accounting for over a third of all oil purchases made by India from overseas. One option being explored by Indian oil firms is to loan the money held in Russian bank accounts to entities that buy oil, with the entities repaying the loan in India. Legal and financial implications of this option are currently being studied. India’s state oil firms have invested $5.46 billion in buying stakes in four different assets in Russia. These investments include a 49.9 per cent stake in the Vankorneft oil and gas field and a 29.9 per cent stake in the TAAS-Yuryakh Neftegazodobycha fields. Following Russia’s invasion of Ukraine, dividend money from these investments has been left stranded due to restrictions on repatriating dollars from Russia and the inability to transfer the funds to India. ONGC Videsh Ltd holds a 26 per cent stake in the Vankor cluster in West Siberia, whilst IOC, Oil India Ltd, and Bharat PetroResources Ltd hold a 23.9 per cent stake in the same project. Separately, officials have suggested that a solution to the issue may emerge in the next two to three months. The dividend income is currently deposited with Commercial Indo Bank LLC (CIBL), a joint venture between the State Bank of India and Canara Bank.
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