Govt Asks State-Run Energy Companies To Consider Acquiring Stakes In Russian Oil Projects

The central government has appealed to state-run energy companies to assess the possibility of purchasing the British oil major BP’s stake in the Russian firm Rosneft, Reuters reports.

BP has declared that it will be abandoning its 19.75 per cent stake in the energy company that is headquartered in Moscow.

The Union Petroleum Ministry expressed its intent regarding the same to the Indian Oil Corporation, Bharat Petro Resources Ltd, Prize Petroleum Ltd, Oil India Ltd and GAIL (India) Ltd last week.

This move comes after BP CEO Bernard Looney had a meeting with cabinet minister Hardeep Singh Puri back in March last year.

Meanwhile, the ministry has also asked ONGC’s overseas investment arm to acquire Exxon Mobile Corp’s 30 per cent stake in Russia’s Sakhalin 1 project.

In fact, the OVL already holds a 20 per cent ownership in Sakhalin 1.

Sources in the know of developments explained that Indian companies are looking to obtain stakes in Russian companies at discounted rates considering that the potential sales could very well be termed as ‘distress sales’.

“Our effort has been to see how we can stabilise economic transactions, economic engagements with Russia in the current context. There are of course constraints, there are sanctions by some countries, and we will have to kind of work through that,” Ministry of External Affairs’ official spokesperson Arindam Bagchi was quoted in the aforementioned report.