ONGC Pursues Two Oilfields in Venezuela, Engages with PDVSA and Seeks US Approval

Oil and Natural Gas Corporation (ONGC) is reportedly in talks with Venezuela’s state-owned oil producer PDVSA to acquire either a portion or the entirety of its holdings in two oilfields in Venezuela. This move comes as Venezuela’s oil industry continues to struggle due to low oil prices, economic mismanagement, and U.S. sanctions, which have significantly weakened PDVSA’s operational capabilities.

Venezuelan Crude Returns to Market

The easing of U.S. sanctions has allowed Venezuelan crude to re-enter international markets, with India emerging as a key buyer. Currently, ONGC Videsh, ONGC’s overseas subsidiary, holds a 40% stake in the San Cristobal oilfield, while PDVSA owns the remaining interest. In the Carabobo-1 project, ONGC Videsh has an 11% stake, with Indian Oil and Oil India each holding 3.5%. PDVSA controls 71% of this project, alongside Spain-based Repsol, which has an 11% stake.

Any potential acquisition by ONGC hinges on obtaining a license from U.S. authorities to operate the two fields. Since the arrest of Venezuelan President Nicolas Maduro in January, the U.S. has exercised oversight over Venezuela’s oil sector, requiring foreign companies to secure U.S. approval for operations and crude sales. ONGC has been in discussions with the U.S. Treasury Department to obtain the necessary permissions, similar to licenses granted to other global energy firms like Chevron and BP.

ONGC’s Operational Goals

ONGC aims to become the sole operator of the San Cristobal field and share operational control of Carabobo-1 with Repsol. The company has expressed its willingness to invest significantly in both assets while seeking greater authority over operational and financial decisions. Acquiring PDVSA’s stakes, contingent on securing the required U.S. license, would help ONGC achieve these goals.

Both oilfields have seen substantial declines in production, reflecting the broader deterioration of Venezuela’s oil sector. In 2024, ONGC sought U.S. approvals to operate the fields, with Venezuela agreeing in principle to transfer operational control to ONGC. ONGC Videsh Managing Director Rajarshi Gupta indicated that production could increase from 12,000-15,000 barrels per day to around 30,000 barrels per day within a year after taking over operations. Gupta also noted that output could potentially rise to 45,000-50,000 barrels per day in subsequent years, aiding in the recovery of over $500 million in pending dividend payments.

Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.

Follow Us on Twitter, Instagram, Facebook, & LinkedIn