New Delhi: Government-owned oil companies are yet to receive dividends worth $300 million to $400 million from Russia since the Ukraine crisis began in February 2022, reports MoneyControl, citing a senior petroleum ministry official.
The issue in payments of dividends to Indian companies arises due to the unavailability of banking channels after Russia was removed from the SWIFT global payment system by the US.
Public sector companies including ONGC, Oil India, BPCL and Indian Oil have stakes in Russian oil and gas projects for which they have not received dividends due to Western sanctions imposed on Moscow. The government is negotiating a way to resolve the issue, the official said, according to the website.
According to Bloomberg, about $2 billion in payments from India to Russia is stuck over the last year, and Russia has decided to stop supplying credit for about $10 billion worth of spare parts as well as the two S-400 missile-defence system batteries that are yet to be delivered.
On April 18, the Narendra Modi government signed a significant deal with the Vladimir Putin administration where India agreed to adopt the Russian financial messaging system, Service Bureau of Financial Messaging System of the Bank of Russia (SPFS), for making banking payments to Russia, as per the New Indian Express. SPFS is a financial messaging system that works like the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the international payment system used by banks to transfer funds worldwide.
After its banking channels were removed from SWIFT, Russia has been asking India to adopt the SPFS to make the payments. Moscow developed the SPFS after Russia was threatened with expulsion from SWIFT when it annexed Crimea in 2014.