The US approval removes a key hurdle for ONGC’s Venezuelan investments and will pave the way in which for the state-run explorer to develop manufacturing, signal new agreements and take over operatorship of some initiatives from Venezuela’s state oil firm PDVSA, Anupam Agarwal, director-finance at ONGC, mentioned at an investor name submit first quarter earnings announcement.
“Now we now have full freedom to work on the Venezuela undertaking as a result of earlier we have been limiting our operations there due to the sanction-related dangers. These dangers are behind us,” Agarwal mentioned.
ONGC Videsh Ltd, the corporate’s abroad funding arm, holds a 40 per cent curiosity within the San Cristobal oil undertaking, whereas the remaining is with Venezuela’s Petroleos de Venezuela S.A. (PDVSA).
It holds one other 11 per cent stake within the Carabobo undertaking, which is below growth.
An OFAC license would allow the corporate to handle the funds of its Venezuelan initiatives and assist it get well a pending dividend of greater than USD 500 million.
ONGC is already in talks with Venezuelan authorities and its joint-venture companions over its pursuits in two initiatives — San Cristobal and Carabobo — and expects constructive developments quickly, together with new agreements and a doable switch of operatorship from PDVSA, he mentioned.
The licence is critical for ONGC as a result of US sanctions on Venezuela’s oil sector have for years difficult monetary transactions, funding and operations involving Venezuelan crude and power belongings.
The corporate had subsequently curtailed exercise regardless of its longstanding presence within the nation.
The corporate can now spend money on the initiatives to boost oil manufacturing. San Cristobal produced round 0.265 million tonnes of oil equal in FY26.
It is a tenth of the manufacturing potential, and the OFAC license means it could actually spend money on elevating output.
Venezuela is strategically vital for ONGC as a result of it holds the world’s largest confirmed crude oil reserves, estimated by OPEC at about 303 billion barrels, greater than Saudi Arabia.
A lot of the nation’s manufacturing potential stays constrained by years of underinvestment, sanctions and operational difficulties, leaving substantial scope for added growth.
Agarwal mentioned Venezuela’s newly enacted petroleum regulation supplies extra fiscal incentives for useful resource growth, probably bettering the funding atmosphere for overseas oil firms and their native companions.
ONGC’s focus is on shallow, onshore fields in Venezuela, the place it has related working experience from its home fields in Western India, together with Mehsana and Ahmedabad, Agarwal mentioned.
The corporate sees the initiatives as a pure match with its current capabilities and is now looking for to speed up growth after the easing of sanctions-related constraints.
“We’re very bullish for Venezuela,” Agarwal mentioned, including that ONGC expects to see new agreements and probably take over operatorship of some initiatives from PDVSA within the close to time period.
OVL invested in Venezuelan oil belongings by way of joint ventures, however sanctions imposed by Washington on Venezuela’s oil sector have periodically restricted the scope of operations and dealings with PDVSA.
The renewed push into Venezuela comes as India seeks to safe abroad oil sources and diversify its provide base amid heightened geopolitical dangers.
For ONGC, better operational management over Venezuelan fields may additionally give the corporate a bigger position in unlocking among the world’s greatest undeveloped and underproduced hydrocarbon sources. — PTI
