Oil and Natural Gas (ONGC) is in talks with Venezuela’s state-run oil company PDVSA to acquire all or part of its stakes in two oilfields in the South American nation, people familiar with the matter said.
ONGC’s overseas arm, ONGC Videsh, holds a 40% participating interest in Venezuela’s San Cristobal field, with PDVSA owning the remaining stake. In the Carabobo-1 field, ONGC Videsh owns 11%, Indian Oil 3.5%, Oil India 3.5%, Spain’s Repsol 11% and PDVSA 71%.
The proposed acquisition is contingent on ONGC securing a US licence to operate the two fields, the people said.
Since the capture of Venezuela’s President Nicolas Maduro in January, Washington has exercised effective control over the country’s oil sector, requiring foreign companies to obtain US authorisation to operate fields and manage oil sales and revenues.
ONGC has been pursuing the US Treasury Department for the necessary approvals, the people said. The US has already granted similar licences to international oil majors, including Chevron, BP, Shell and Repsol, to operate in Venezuela.
ONGC aims to become the sole operator of San Cristobal and a joint operator of Carabobo alongside Repsol, the people said.
The company has previously expressed willingness to invest substantially in the two fields but sought greater control over their operations and finances. Acquiring PDVSA’s stakes, after obtaining the required US licence, would help achieve those objectives.
ONGC Videsh did not respond to ET’s queries.
Both San Cristobal and Carabobo have suffered steep production declines, mirroring the broader downturn in Venezuela’s oil industry. The current output from these fields could not be ascertained.
In 2024, ONGC had sought US sanctions relief to operate the two fields. Venezuela had then agreed to hand operational control of the assets to ONGC, although no formal agreements were signed, ONGC Videsh managing director Rajarshi Gupta said in August 2024.
Once ONGC assumes operational control, production from the two fields could rise to 30,000 barrels per day within a year from the then 12,000-15,000 barrels per day, Gupta had then said.
Output could further increase to 45,000-50,000 barrels per day over the following few years, helping ONGC recover more than $500 million in dividends that have remained stuck for years, he said.
In 2017, PDVSA had offered to sell a 9% stake in the San Cristobal field to ONGC. The Indian company declined the proposal, preferring first to secure dividend payments from the asset.
Venezuela’s oil production has fallen over the years due to a combination of low oil prices, economic mismanagement and US sanctions, while PDVSA’s operational capabilities have steadily eroded.
Following the US oversight of Venezuela’s oil sector and the lifting of sanctions, Venezuelan crude has begun flowing freely into global markets, with India emerging as a key buyer.
Source: Economic Times