India asks state firms to consider buying Russian oil assets

The call on Indian companies to explore buying the stake in Rosneft came after BP CEO Bernard Looney met Indian Oil Minister Hardeep Singh Puri in March

India has asked State-run energy companies to evaluate the possibility of buying European oil major BP’s stake in sanctions-hit Russian firm Rosneft, two people familiar with the matter said.

“BP has announced that it is abandoning its 19.75% stake in Rosneft. The Oil Ministry last week conveyed its intent to ONGC Videsh Limited (OVL), Indian Oil Corporation, Bharat Petro Resources Limited (BPRL), Hindustan Pertoleum’s subsidiary Prize Petroleum Limited, Oil India Limited and GAIL (India) Limited,” the sources said.

Indian companies and the Oil Ministry did not respond to Reuters emails seeking comment. While Western nations have imposed sanctions against Russia over the war in Ukraine, India has not explicitly condemned Moscow's actions there.

The world's third biggest oil importer and consumer, India imports about 85% of its five million barrels per day (bpd) of oil needs. The call on Indian companies to explore buying the stake in Rosneft came after BP CEO Bernard Looney met Indian Oil Minister Hardeep Singh Puri in March. BP declined to comment.

Oil Ministry also asked OVL, the overseas investment arm of Oil and Natural Gas Corp, to consider buying a 30% stake held by Exxon Mobile Corp, in the Sakhalin 1 project in Russia's Far East. Exxon is the operator of the project.

OVL already holds a 20% stake in the project. Exxon said on March 1 that it would exit about $4 billion in assets and discontinue all its Russia operations, including Sakhalin 1. OVL also holds 26% stake in Vankorneft, owner of the Venkor field in the West Siberian Basin. Separately, a consortium of Oil India, IOC and BPRL, the exploration arm of State refiner Bharat Petroleum Corporation, holds a 23.9% stake in Vankorneft and a 29.9% stake in Taas-Yuryakh in east Siberia.

One of the sources said Indian companies hope to get stakes in Russian assets at discounted rates given the risk involved, dubbing the potential transactions "distress sales". A second source said Indian companies needed to study the impact of sanctions on potential investments and yet to start a process of due diligence.