Key facts
- ONGC Videsh Ltd (OVL) is considering reviving its operations at two onshore oil assets in Venezuela.
- OVL still expects approximately $900 million in unpaid dividends from Venezuela's state oil firm PDVSA.
- OVL holds a 40% stake in the San Cristobal asset and an 11% stake in the Petrocarabobo asset.
- The U.S. has eased some sanctions on Venezuela, allowing for increased commercial activity in key sectors like oil.
- Venezuela's oil production has seen a significant increase, reaching a seven-year high in May.
ONGC Videsh Ltd (OVL), the overseas arm of India's state-owned Oil and Natural Gas Corporation, is considering a revival of its operations in Venezuela. This move comes as Venezuela, which possesses the world's largest crude oil reserves, is actively encouraging foreign investment in its energy sector. OVL holds minority stakes in two onshore oil concessions: San Cristobal, where it has a 40% share, and Petrocarabobo, with an 11% stake. These assets have been underutilized for years due to U.S. sanctions. However, recent easing of some U.S. sanctions and Venezuela's new legal framework, which permits foreign participation and profit repatriation, have created a more favorable environment. Industry executives suggest that current economic conditions are suitable for resuming operations, and OVL is re-evaluating the situation. The company is expected to draft recovery and resumption plans for both fields in the coming months, though timelines may be subject to the country's volatile operating environment. Venezuela's oil exports have reached a seven-year high, with shipments to the U.S. and India increasing.