Key facts
- India's Oil and Natural Gas Corporation (ONGC) received a U.S. license to operate in Venezuela.
- ONGC holds stakes in the San Cristobal and Carabobo oil projects.
- The return could grant access to over $500 million in dividends.
- ONGC is negotiating to potentially take over operatorship of these projects.
- India has become a significant buyer of Venezuelan crude oil.
India's Oil and Natural Gas Corporation (ONGC) has been granted a license by the U.S. Office of Foreign Assets Control (OFAC) to resume its activities in Venezuela. This development allows the Indian energy giant to re-engage with its stakes in the San Cristobal and Carabobo oil projects, potentially unlocking over $500 million in accumulated dividends.
ONGC is reportedly in discussions with the Venezuelan government regarding new partnership agreements, which could see the company assume operatorship of both the San Cristobal project and the developing Carabobo project. Anupam Agarwal, ONGC's finance director, indicated that the company's overseas arm, ONGC Videsh, now possesses the "full freedom" to explore these opportunities following the easing of U.S. sanctions-related restrictions.
Venezuela's recently enacted petroleum law is said to offer enhanced incentives for foreign investors, bolstering confidence in finalizing agreements for project operatorship transfers from the state-owned PDVSA. This move aligns with India's broader strategy to diversify its crude oil imports, as the nation seeks to replace barrels from the Middle East amid ongoing geopolitical tensions impacting shipping routes like the Strait of Hormuz. India has significantly increased its purchases of Venezuelan crude, becoming the second-largest buyer after the United States in recent months.