OVL's wait for dividend from Sakhalin-1 oil field lengthens

Sakhalin-1 shares are yet to be transferred to ONGC Videsh, delaying the dividend payout

- Utpal Bhaskar

With state-run ONGC Videsh Ltd (OVL) yet to get equity rights for its shares in Russian energy project Sakhalin-1, the overseas arm of Oil and Natural Gas Corp. has not received any dividend payments, two people aware of the development said.

The project is India’s most lucrative energy equity investment overseas and has been a significant source of returns for ONGC since its acquisition in 2001. However, despite efforts to address the issue with Rosneft and at various levels of the Russian government, a resolution has not yet been reached. 

OVL purchased the stake for around $331 million, and the investment has since yielded significant gains in the form of equity oil. Rosneft, on its part, has invested nearly $13 billion in India.