ONGC Videsh close to getting US approval to resume ops in Venezuela amid sanctions

New Delhi: Oil and Natural Gas Corporation’s (ONGC) overseas subsidiary, ONGC Videsh Ltd (OVL), may soon get a licence from the US Office of Foreign Assets Control (OFAC) to resume operations in Venezuela. At a press interaction on Friday, OVL’s Managing Director Rajarshi Gupta said that the company has applied to the US authorities to seek a licence to operate the two assets in Venezuela in which it has stakes and the proposal is in advanced stages of consideration by the US government.

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ONGC Videsh has stakes in two oil fields in Venezuela — San Cristobal and Carabobo-1 — but has not been able to receive dividends for a long time now, initially due to a financial crisis in the Latin American country and then the imposition of the US sanctions. OVL has not been able to repatriate dividends to the tune of USD 500 million from Venezuela. If OVL gets the licence, it will be able to take over operations in the two fields.

“We are in discussion with the Venezuelan government to take charge of operations of the two projects there… same as Chevron has been doing. At the same time, we have been interacting with OFAC. They gave us some comfort that yes you can do some operations subject to pre-conditions. We have sought a specific licence to operate in Venezuela. That’s in the final stages of consideration to the best of our understanding,” Gupta told reporters.

OVL to emulate ‘Chevron model’ to resume ops in Venezuela

US oil major Chevron has been operating its fields in Venezuela after securing a license from the US government. This license allows the company to use US channels of payments and other services needed for operation. OVL is seeking the same licence from the US government, said Gupta.

Venezuelan state-run company, PDVSA, which has a majority stake in the two fields and controls the operation and finances of these fields, has agreed to give OVL operational control. However, agreements are yet to be signed and will depend on the exemptions granted by the US government from sanctions, said the OVL MD. “ONGC is ready to take charge immediately after necessary approvals,” he added. ONGC Videsh is the joint operator, along with PDVSA, for San Cristobal and Carabobo-1 oil fields in Venezuela. The ONGC subsidiary holds 49 percent stake in San Cristobal and 11 percent in Carabobo.

Gupta said that OVL is prepared to ramp up its workforce in Venezuela after it receives a licence from the US government to operate the two fields. The current crude oil production from the two assets stands at 12,000-15,000 barrels per day (bpd), which can be ramped up to 45,000-50,000 bpd, said Gupta.

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