India's state-owned ONGC Videsh Ltd and its partners will pay $230 million to Russian energy giant Rosneft in an out of court settlement of a dispute regarding oil production in Russia's Sakhalin-1 oil field.
"We have agreed for an out-of-court settlement and the consortium has agreed to pay $230 million," N.K. Verma, managing director, ONGC Videsh, told reporters in New Delhi.
Verma said that the Indian firm has already made the payment to Rosneft.
Gas production from the project — India's first major investment in Russia's energy sector — is increasing after Russia lifted output restrictions as part of a global deal with OPEC. Verma stated that production at the Sakhalin-1 project reached 250,000 barrels per day, up from some 200,000 bpd.
Sakhalin-1 is a large-scale project and is carried out under a production sharing agreement (PSA) signed in 1996. The production is being carried out on the northeastern shelf of Sakhalin Island.