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Moody’s Investors Service has said  that Indian companies’ value of investments in Russia’s oil and gas fields could be impaired as import bans and international sanctions may constraint future cash flow generating capacity. Oil and Natural Gas Corporation (ONGC), Oil India (OIL), Indian Oil Corporation (IOC) and Bharat Petroleum Corporation (BPCL) have invested in upstream oil and gas assets in Russia. While multinationals like BP and Shell have announced withdrawal from Russia after its invasion of Ukraine, Indian companies have not announced an exit from their Russian investments.

It said this will lead to a limited impairment in the value of investments immediately, especially under the current oil price environment. Indian firms have invested $16 billion in Russian assets such as the Sakhalin-1 oil and gas field in the far east. It stated they may face hurdles in receiving dividend payments but the impact on earnings will not be significant.

It mentioned that if an increasing number of Russian banks are excluded from the main financial messaging SWIFT system, Indian companies might not be able to receive future dividends from their upstream investments in Russia. However, even in a situation where the companies cannot access these cash flows, the impact on their financial profiles will not be significant. For most companies, dividend income from the Russian investments constitutes less than 5-6 per cent of consolidated EBITDA.