ONGC Videsh making a proposal to retake 20% stake in Russia's Sakhalin-1

ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corporation (ONGC), is making a proposal to retake 20 per cent stake in Russia's Sakhalin-1 oil and gas project in the far east, sources said.

Russian President Vladimir Putin earlier this month disbanded Exxon Neftegaz - a regional subsidiary of US supermajor ExxonMobil - as operator of the Sakhalin-1 and transferred the project and all of its assets and equipment to a new operator.

The other former foreign shareholders in the project - Japan's Sodeco consortium and ONGC Videsh - have to apply to the Russian government to regain their shareholdings in the project.

OVL is in the process of applying to regain the 20 per cent stake it held in the project, three sources aware of the matter said.

"We want to retain the shareholding and will do all that the local law requires us to do," a source said.

Sakhalin-1 is OVL's cash cow and without the project, the company will be a loss-making entity, another source ...