OVL seeks legal advice following US sanctions on oilfield with Indian stakes

ONGC Videsh Ltd has sought legal opinion after the United States imposed sanctions on a Russian oilfield in which a consortium of Indian companies holds 49.9 per cent stake, sources said.

- MPOST BUREAU

US President Donald Trump on October 22 announced new sanctions against two of Russia's largest oil companies, Rosneft and Lukoil, in a bid to pressure Moscow into ending its war with Ukraine.

As part of these, the US Department of the Treasury's Office of Foreign Assets Control (OFAC) designated a number of Russia-based Rosneft and Lukoil subsidiaries in which they, directly or indirectly, held a 50 per cent or more stake.

‘The list of subsidiaries thus blocked includes CJSC Vankorneft, in which OVL has a 26 per cent stake, and an Indian consortium comprising Oil India Ltd (OIL), Indian Oil Corporation (IOC) and Bharat PetroResources Ltd, which holds 23.9 per cent. The remaining 50.1 per cent is with Rosneft.

While a plain reading of the OFAC sanctions indicates that the restrictions do not apply to Indian companies, OVL is seeking legal opinions from domestic and international law firms to ensure it does not violate any sanctions, two sources with direct knowledge of the matter said.

‘The OFAC sanctions should not apply to Indian companies, as they do not hold a 50 per cent stake in Vankorneft, which has been designated as a sanctioned entity, they said.