Indian oil company ONGC Videsh Ltd (OVL) is in talks with the Russian government to pay its contribution to the Sakhalin-1 abandonment fund in roubles, a company official said on Monday.

The contribution is a requirement for OVL to take a 20% stake in the project, which is operated by a new Russian entity.

"We are at an advance stage of trying to pursue Rosneft to accept the abandonment obligation of OVL for getting back its 20% share (in the Sakhalin 1 project)," Vinod Hallan, a finance executive at OVL, told an analysts' call.

An abandonment fund is used for decommissioning activities to ensure that wells are properly shut in and that the process would not affect the environment in future.

OVL, the overseas investment arm of India's top explorer Oil and Natural Gas Corp, and other state-run Indian companies have not been able to repatriate their dividends for stakes in producing Russian energy assets due to sanctions.

The overall pending dividends of Indian companies amount to around $500-$600 million.

OVL is looking at using the pending dividend to pay for its share in the abandonment fund in roubles, Hallan said on ONGC's post-earnings call for analysts.

"Our application with Russian authorities is expected to be heard very soon and we hope to close the transaction of meeting the abandonment obligation," he said.

A raft of Western sanctions have made it difficult to transfer funds to Russia in dollars and payment in roubles require approval from the Russian authorities.

Last April ONGC got back its $600 million contribution made to the previous abandonment fund for Sakhalin 1 from the foreign party administrator after ExxonMobil's exit from the project, ONGC said in May last year.

The Russian government has agreed to grant OVL a 20% stake in the new project operator Sakhalin-1 LLC provided it makes the contribution to the new accumulated fund.

(Reporting by Nidhi Verma; Editing by Susan Fenton)