ONGC Videsh, overseas arm of the state-run explorer, has a 20% stake in the Sakhalin-1 project in Siberia and is responsible for sale of its share of oil from the project
New Delhi, March 30 - Neftegaz.RU.
2 Indian state-run refiners have won the contract
to buy 1.4 million barrels of Russian oil from ONGC's Sakhalin-1 project, according to people familiar with the matter.
ONGC Videsh, overseas arm of the state-run explorer, has a 20% stake in the Sakhalin
-1 project in Siberia and is responsible for sale of its share of oil from the project.
The company didn't receive any bid for its tender to sell 700,000 barrels of oil from Sakhalin-1 two weeks ago.
In a fresh tender last week, ONGC Videsh received multiple bids, according to the people cited above.
The companies that bid include Indian Oil
, Bharat Petroleum, Hindustan Petroleum and Mangalore Refinery, said the people cited earlier.
2 state-run refiners won the bid to buy 700,000 barrels each from ONGC Videsh for May loading, they said.
It's not yet clear which companies have won the bids.
Refiners are likely to pay ONGC Videsh in rupees for the oil purchased, they said.
Indian refiners have been picking up Russian oil
cargoes from various international commodity traders in the past few weeks but do not foresee any payment
problems as the energy trade does not face western sanctions.
The traders are non-Russian entities.
All recent purchase deals are on a delivered basis, leaving sellers with the responsibility of arranging shipping and insurance for their cargoes.
Financiers and insurers have been reluctant to back Russian oil cargoes, fearing the effects of US-led sanctions.
ONGC Videsh's oil from Sakhalin is unlikely to face any shipping or insurance hurdle as it's the equity oil of an Indian company, said a person familiar with the matter.
At a Discount
There has been talk about creating an alternative mechanism that bypasses the SWIFT framework and dollars to pay for trade between Russia and India
Junior oil minister Rameswar Teli, however, told Parliament on Monday that there is no proposal under consideration from Russi
a or any other country for the purchase
of crude oil in rupees.
, the country's largest natural gas marketer, is continuing to pay in dollars for the LNG
it imports from Russia's Gazprom, a company executive has said.
Russian oil has traditionally comprised barely 1-2% of Indian refiners' annual crude diet. Its availability at a deep discount at a time when oil prices are going through the roof has made it attractive to Indian refiners.
Russian oil is available at a discount of about $30 to dated Brent, the international benchmark, which helps offset the expensive freight.
It takes about 3 weeks for Russian cargo to reach India, compared with a week from the Gulf.