ONGC Videsh Ltd (OVL), the overseas unit of India’s state-owned Oil and Natural Gas Corporation (ONGC), considers reviving operations at its two onshore oil assets in Venezuela as the world’s top crude resource holder is welcoming foreign companies back to its industry.
OVL plans to resume its operations in Venezuela even if it still expects about $900 million in dividends due from state oil firm PDVSA for its stake in the two oil concession assets, Indian outlet Economic Times reported on Tuesday, quoting industry executives familiar with the development.
OVL holds minority stakes in two onshore concessions in Venezuela, San Cristobal in the Orinoco belt and Petrocarabobo in Eastern Orinoco. PDVSA holds majority stakes in both assets, while OVL has 40% in San Cristobal and 11% in Petrocarabobo.
“The economic conditions in Venezuela are now suitable for operations, so all the field operators are going back, and OVL is also re-examining the situation,” one industry executive told ET.
The San Cristobal asset is in a more advanced stage of planning, but the Indian firm is expected to draft a recovery and resumption plan for both fields in the coming months.
Since taking over Venezuela’s oil sales in January, the U.S. has eased sanctions and urged foreign companies to invest in Venezuela.
Indian energy companies are interested in expanding into Venezuelan oil, New Delhi’s top energy official Hardeep Singh Puri said last week at a meeting with Venezuela’s interim president Delcy Rodriguez in India.
In yet another step toward more oil from Venezuela, the U.S. last week eased several key general licenses for operations in Venezuela, allowing additional activity, although it did not remove sanctions fully. The new U.S. Treasury guidance eases certain commercial constraints in key sectors, including oil, gas, and minerals extraction.
Venezuela is back on international markets with its oil sales under U.S. control and being marketed by top commodity trading houses Vitol and Trafigura. Venezuela’s oil exports hit a fresh seven-year high in May as shipments to the United States and India surged.
By Tsvetana Paraskova for Oilprice.com
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