New Delhi: State-owned Oil and Natural Gas Corporation (ONGC) has secured a licence from the US Treasury’s Office of Foreign Assets Control (OFAC), allowing it to resume full operations in Venezuela after years of restricting activities due to sanctions-related risks.
The approval is expected to remove a major hurdle for ONGC’s Venezuelan investments and could allow the company to increase production, enter into new agreements and potentially take over operatorship of some projects from Venezuela’s state-owned oil company PDVSA.
ONGC Director-Finance Anupam Agarwal shared the development during an investor call following the company’s first-quarter earnings announcement.
OFAC Licence Opens Door for ONGC’s Venezuela Operations
Agarwal said the OFAC approval gives ONGC greater freedom to work on its Venezuelan projects, where operations had previously been restricted because of sanctions-related risks.
The US sanctions on Venezuela’s oil sector had complicated financial transactions, investments and operations involving Venezuelan crude and energy assets.
With the licence now in place, ONGC can explore greater operational involvement in its Venezuelan assets and accelerate development activities.
ONGC Videsh Holds Stakes in San Cristobal and Carabobo
ONGC’s overseas investment arm, ONGC Videsh Limited (OVL), has interests in two major Venezuelan oil projects.
Its holdings include:
- San Cristobal project: 40% stake
- Carabobo project: 11% stake
- Remaining San Cristobal stake: Held by Venezuela’s PDVSA
- Carabobo: Project is currently under development
ONGC is already in discussions with Venezuelan authorities and its joint-venture partners regarding both projects.
The company expects positive developments in the near term, including new agreements and the possibility of taking over operatorship of some projects from PDVSA.
OFAC Licence Could Help Recover Over $500 Million Dividend
The licence is also significant from a financial perspective.
According to ONGC, the OFAC approval would allow the company to manage the finances of its Venezuelan projects and could help it recover a pending dividend of more than $500 million.
The easing of sanctions-related restrictions could therefore improve both the operational and financial position of ONGC’s Venezuelan investments.
ONGC Eyes Higher Production From San Cristobal
The company now has the opportunity to invest in its Venezuelan projects to increase oil production.
The San Cristobal project produced around 0.265 million tonnes of oil equivalent (MMTOE) in FY26, which ONGC said represents only around one-tenth of its production potential.
With the OFAC licence removing a major operational constraint, ONGC can now consider additional investments to raise production from the field.
The company believes there is significant scope to unlock production from its existing Venezuelan assets.
Venezuela Holds Strategic Importance for ONGC
Venezuela remains strategically important for ONGC because the country has the world’s largest proven crude oil reserves.
According to OPEC estimates cited by the company, Venezuela has around 303 billion barrels of proven crude oil reserves, exceeding Saudi Arabia’s reserves.
However, years of underinvestment, sanctions and operational challenges have constrained the country’s production, leaving considerable potential for additional development.
ONGC sees the easing of restrictions as an opportunity to participate more actively in developing these resources.
New Venezuelan Petroleum Law Could Improve Investment Climate
Agarwal said Venezuela’s newly enacted petroleum law provides additional fiscal incentives for resource development.
The changes could potentially improve the investment environment for foreign oil companies and their local partners.
ONGC is therefore assessing opportunities to accelerate development of its Venezuelan assets as operating and investment conditions improve.
ONGC Sees Strong Potential in Shallow Onshore Fields
ONGC’s focus in Venezuela is on shallow, onshore oil fields, where the company believes it can leverage its existing operating expertise.
Agarwal said ONGC has relevant experience from its domestic operations in western India, including fields in Mehsana and Ahmedabad.
The company considers the Venezuelan projects a natural fit with its existing capabilities and plans to accelerate development following the easing of sanctions-related restrictions.
Agarwal expressed strong optimism about the company’s Venezuela operations and said ONGC expects new agreements and potentially greater operatorship responsibilities in the near term.
India’s Overseas Energy Strategy Gets a Boost
ONGC’s renewed focus on Venezuela comes as India continues to seek overseas oil resources and diversify its energy supply base amid heightened geopolitical risks.
Greater operational control over Venezuelan projects could give ONGC a larger role in developing some of the world’s biggest underproduced hydrocarbon resources.
For ONGC, increased production from Venezuela could also strengthen its overseas portfolio and support its broader strategy of securing long-term energy resources.
About ONGC
Oil and Natural Gas Corporation Limited (ONGC) is India’s leading state-owned oil and gas exploration and production company. A Maharatna Central Public Sector Enterprise under the Ministry of Petroleum and Natural Gas, ONGC operates across exploration, development and production of crude oil and natural gas in India and through its overseas arm, ONGC Videsh, in international markets.
