ONGC Negotiates Venezuelan Oil Projects
India’s Oil and Natural Gas Corp. (ONGC) is in talks to take over operations at two oil projects in Venezuela. The goal is to recover over $500 million in unpaid dividends. ONGC's overseas arm, ONGC Videsh, is in advanced discussions with Venezuelan and U.S. authorities, according to finance chief Anupam Agarwal. The agreements are expected to be finalized within three to six months.
ONGC currently holds stakes in the San Cristobal and Carabobo 1 oil fields but does not operate them. Under the proposed deal, ONGC would manage these projects and market their production. At San Cristobal, ONGC owns 40%, while Venezuela's state oil company PDVSA holds the remaining 60%. For Carabobo 1, ONGC and other Indian firms together hold an 18% stake, with Spain's Repsol owning 11%.
These discussions come as Venezuela aims to revive its oil sector, which has faced years of underinvestment. Chevron has announced over $7 billion in investments in Venezuela over the next five years. Eni and Repsol have also expanded their operational roles. Rystad Energy projects that Venezuela could produce 1.6 million barrels per day by 2028, depending on increased investment and services. However, challenges remain, with only two drilling rigs active in the country as of August. This is far below the estimated 50 needed to meet production goals.
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ONGC's potential takeover could affect oil production levels in Venezuela. This may influence global oil supply dynamics. Investors will closely watch developments regarding the agreements and their impact on ONGC's financial recovery and operational strategy in Venezuela.
Based on reporting by: oilprice.com, moneycontrol.com