October 26, 2025

Big news from the oil front! ONGC Videsh Ltd (OVL), the overseas arm of India's Oil and Natural Gas Corporation, is in a legal fix after US slapped fresh sanctions on Russia’s giant oil companies. On October 22, US President Donald Trump kicked off new sanctions on Rosneft and Lukoil, two of Russia's oil titans, in a strong move to pressure Moscow over the Ukraine war. Here’s the catch: the US Treasury’s OFAC froze assets of Russian subsidiaries holding 50% or more stakes by these giants. One such company is CJSC Vankorneft, the owner of the Vankor oilfield. Now, an Indian consortium including OVL, Oil India Ltd (OIL), Indian Oil Corporation (IOC), and Bharat PetroResources Ltd holds a sizable 49.9% stake in Vankorneft — OVL with 26% and the rest shared by the others. Rosneft owns 50.1%. Though the US rules say the sanctions target entities with 50% or higher Russian stake, Indian firms want to be 100% sure they don’t get caught in the crossfire. Sources reveal OVL has asked law experts both in India and abroad if these sanctions apply to them. The good news? Since Indian companies hold less than 50% and aren’t operators of the oilfield, the sanctions “should not apply.” Also, Indian players do not get direct oil shares (equity oil) from the field. Instead, they earn dividends from the joint venture’s profits from selling oil and gas. Unfortunately, these dividends totaling about $1.4 billion have been stuck in Russian banks for three years because of ongoing sanctions. A bit of background: In 2016, OVL bought a 15% stake in Vankorneft for $1.284 billion, scoring rights to 4.11 million tonnes of oil and gas. Later that year, it added 11% for $930 million and got access to 3.2 million tonnes more. The Indian consortium grabbed 23.9% for $2.02 billion. Vankor oilfield sprawls over 416.5 square kilometers in Russia’s West Siberian Basin. Since the new US sanctions say “all property and interests of designated persons in the US or controlled by US persons are blocked,” Indian firms want to keep clear of any violations. Breaking sanctions could hurt them badly — from fines to losing access to foreign funds and US dollar transactions. So, while India’s oil giants hold almost half the pie in a Russia oilfield, they’re treading carefully in this tricky sanction web.

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Tags: Ongc videsh, Russian sanctions, Rosneft, Oilfield stake, Us treasury, Vankorneft,