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India Navigates Russia Sanctions for Sakhalin Stake
5 Dec, 2025
Summary
- India will pay roubles into Sakhalin-1 abandonment fund.
- Companies use frozen dividends to retain 20% Sakhalin stake.
- Deal aims to repatriate nearly $800 million in dividends.
India's Oil and Natural Gas Corp (ONGC) is set to contribute to Russia's Sakhalin-1 oil and gas field abandonment fund using roubles. This strategic payment will be facilitated by utilizing approximately $800 million in dividends that Indian companies previously had frozen due to Western sanctions.
ONGC Videsh Ltd, ONGC's overseas investment arm, and other state-run Indian entities have agreed to provide a loan from these blocked dividends. This allows ONGC Videsh to maintain its 20% ownership in the crucial Sakhalin-1 project amidst complex international financial regulations.
The arrangement, which requires Russian governmental approval, comes as India seeks to secure its energy investments following Russian President Vladimir Putin's decree allowing foreign shareholders to regain stakes under specific conditions, including supporting the lifting of sanctions.
