ONGC gets U.S. licence to resume full Venezuela operations, eyes operatorship

State-owned Oil and Pure Fuel Corp (ONGC) has secured a licence from the U.S. Treasury’s Workplace of Overseas Belongings Management (OFAC), permitting it to renew full operations in Venezuela after years of limiting exercise due to sanctions-related dangers, a senior firm official mentioned.

The U.S. 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 tasks from Venezuela’s state oil firm PDVSA, Anupam Agarwal, director-finance at ONGC, mentioned at an investor name put up first quarter earnings announcement.

“Now we’ve full freedom to work on the Venezuela challenge as a result of earlier we have been limiting our operations there due to the sanction-related dangers. These dangers are behind us,” Mr. Agarwal mentioned.

ONGC Videsh Ltd, the corporate’s abroad funding arm, holds a 40% curiosity within the San Cristobal oil challenge, whereas the remaining is with Venezuela’s Petroleos de Venezuela S.A. (PDVSA).

It holds one other 11% stake within the Carabobo challenge, which is beneath improvement.

An OFAC license would allow the corporate to handle the funds of its Venezuelan tasks and assist it get well a pending dividend of greater than $500 million.

ONGC is already in talks with Venezuelan authorities and its joint-venture companions over its pursuits in two tasks, San Cristobal and Carabobo, and expects optimistic 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 U.S. sanctions on Venezuela’s oil sector have for years difficult monetary transactions, funding and operations involving Venezuelan crude and vitality belongings. The corporate had due to this fact curtailed exercise regardless of its longstanding presence within the nation.

The corporate can now spend money on the tasks to lift oil manufacturing. San Cristobal produced round 0.265 million tonnes of oil equal in FY26. This can be a tenth of the manufacturing potential, and the OFAC license means it could actually spend money on elevating output.

Venezuela’s strategic significance

Venezuela is strategically necessary 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 extra improvement.

Mr. Agarwal mentioned Venezuela’s newly enacted petroleum legislation supplies extra fiscal incentives for useful resource improvement, probably enhancing the funding surroundings 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,” Mr. Agarwal mentioned.

The corporate sees the tasks as a pure match with its present capabilities and is now looking for to speed up improvement after the easing of sanctions-related constraints.

“We’re very bullish for Venezuela,” Mr. Agarwal mentioned, including that ONGC expects to see new agreements and probably take over operatorship of some tasks from PDVSA within the close to time period.

OVL invested in Venezuelan oil belongings by 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, larger operational management over Venezuelan fields might additionally give the corporate a bigger position in unlocking a number of the world’s largest undeveloped and underproduced hydrocarbon sources.