Key facts
- ONGC Videsh is expected to sign new agreements for two Venezuelan oil projects soon.
- The agreements will transfer operational control from PDVSA to ONGC Videsh.
- Venezuela's new petroleum law provides additional incentives for foreign investors.
- ONGC Videsh previously limited its activities due to U.S. sanctions.
- ONGC also regained its full stake in Russia's Sakhalin-1 project in December.
India's ONGC Videsh is nearing agreements to take operational control of two Venezuelan oil projects from state-owned PDVSA, a move that would grant the Indian producer direct oversight of assets within the world's largest proven crude oil reserves. Finance Director Anupam Agarwal stated that ONGC Videsh now has 'full freedom' to pursue opportunities in Venezuela following the easing of sanctions-related constraints that had previously restricted its activities. The company currently holds a 40% stake in the San Cristobal oil field and an 18% interest in the Carabobo-1 heavy oil project alongside other Indian firms. Agarwal expressed confidence that agreements transferring operatorship could be finalized soon, citing additional incentives for foreign investors under Venezuela's new petroleum law.
Separately, ONGC announced it regained its full 20% stake in Russia's Sakhalin-1 oil and gas project in December, after a four-year disruption. This restored interest has doubled Sakhalin-1's quarterly revenue contribution to approximately 10 billion Indian rupees ($105 million). The company retained its stake by agreeing to make abandonment fund payments in rubles using dividends previously frozen in Russia.
The developments come as India's purchases of Venezuelan crude have decreased. Venezuela's crude exports fell 25% in July to about 856,000 barrels per day, with shipments to India roughly halved from June, as improved Middle East supply reduced demand for discounted Venezuelan barrels in Asia.