Oil and Natural Gas Corporation (ONGC) secured a licence from the US Treasury’s Office of Foreign Assets Control (OFAC), allowing the energy company to resume full operations in Venezuela after years of limited activity due to sanctions-related restrictions. The approval removes a major hurdle for ONGC’s Venezuelan investments and could enable the company to increase oil production, enter new agreements and potentially take over operatorship of certain projects from Venezuela’s state-owned oil company, PDVSA.
OFAC Licence Clears Operational Hurdles
Anupam Agarwal, Director-Finance at ONGC, said the US approval gives the company greater flexibility to operate its Venezuelan projects. Previously, ONGC had restricted its activities because of the risks associated with US sanctions. With the OFAC licence now in place, the company can resume broader operational and financial activities in the country. The approval could also help ONGC recover a pending dividend of more than $500 million from its Venezuelan investments.
ONGC Holds Stakes in San Cristobal and Carabobo
ONGC Videsh Ltd (OVL), ONGC’s overseas investment arm, holds a 40% stake in the San Cristobal oil project, while Venezuela’s PDVSA owns the remaining interest. OVL also holds an 11% stake in the Carabobo project, which is currently under development. ONGC is already engaging with Venezuelan authorities and its joint-venture partners regarding both projects. The company expects progress on new agreements and is also exploring the possibility of taking over operatorship from PDVSA.
Company Plans to Increase Venezuela Oil Output
The OFAC licence will allow ONGC to invest more actively in its Venezuelan projects and work towards increasing production. San Cristobal produced around 0.265 million tonnes of oil equivalent (Mtoe) in FY26, which ONGC believes represents only about one-tenth of the field’s potential. Therefore, the company sees significant scope to raise output through additional investment and development. Moreover, greater operational involvement could enable ONGC to apply its experience from mature onshore oil fields in India.
Venezuela Offers Significant Oil Potential
Venezuela remains strategically important for ONGC because it holds the world’s largest proven crude oil reserves. OPEC estimates the country’s reserves at around 303 billion barrels, exceeding Saudi Arabia’s proven reserves. However, years of underinvestment, sanctions and operational challenges have constrained Venezuela’s oil production. Consequently, ONGC sees substantial opportunities to develop underproduced resources. Agarwal also noted that Venezuela’s newly enacted petroleum law provides additional fiscal incentives for resource development, potentially improving the investment environment for international oil companies and their local partners.
ONGC Eyes Greater Role in Venezuelan Projects
ONGC’s focus in Venezuela is on shallow, onshore oil fields, where the company can leverage its experience from domestic operations in Western India, including Mehsana and Ahmedabad. The company views these projects as a natural fit with its existing technical and operational capabilities. It now plans to accelerate development as sanctions-related restrictions ease. “We are very bullish for Venezuela,” Agarwal said, indicating that ONGC expects new agreements and potentially greater operatorship responsibilities in the near term.
Venezuela Push Supports India’s Energy Security
The renewed focus on Venezuela comes as India seeks to secure overseas oil resources and diversify its crude supply sources amid rising geopolitical risks. As reported by thehindubusinessline.com, for ONGC, increased operational control over Venezuelan assets could provide an opportunity to expand production and participate more actively in developing some of the world’s largest underdeveloped and underproduced hydrocarbon resources.
