Key facts
- ONGC Videsh Ltd secured a license from the U.S. OFAC to operate in Venezuela.
- ONGC plans to invest approximately $200 million to revive the San Cristobal oilfield.
- The investment aims to increase the oilfield's output tenfold from its current 4,000-5,000 bpd to up to 50,000 bpd.
- ONGC holds a 40% stake in the San Cristobal oilfield, with PDVSA holding the remaining 60%.
India's state-owned Oil and Natural Gas Corporation (ONGC), through its overseas unit ONGC Videsh Ltd (OVL), is planning a significant investment to revive production in Venezuela. The company intends to invest approximately $200 million to boost output at the San Cristobal oilfield tenfold, from its current 4,000-5,000 barrels per day (bpd) to a peak of up to 50,000 bpd.
This move follows ONGC securing a crucial license from the U.S. Office of Foreign Assets Control (OFAC), which permits the company to resume operations in Venezuela after years of reduced activity due to U.S. sanctions. ONGC Videsh holds a 40% stake in the San Cristobal project, with Venezuela's state oil firm PDVSA owning the remaining 60%.
Sources indicate that ONGC will also finance PDVSA's share of the investment, recouping the total $200 million through future production from the oilfield. The companies are reportedly close to finalizing an investment plan agreement. The targeted tenfold increase in production is expected to occur over the coming years, aiming to restore output to levels seen before sanctions, mismanagement, and underinvestment impacted the field.