ONGC Videsh Ltd. (OVL), the overseas investment arm of Oil and Natural Gas Corporation (ONGC), is seeking to assume operatorship of two shallow onshore oil blocks in Venezuela following the receipt of a licence from the US Office of Foreign Assets Control (OFAC). The licence gives the company greater operational flexibility in the South American nation, positioning Venezuela as a key focus area in ONGC Videsh’s international upstream growth strategy.
Company Eyes Greater Operational Control
Anupam Agarwal, Chief Financial Officer of ONGC, said the OFAC licence provides ONGC Videsh with “full freedom” to operate in Venezuela. The company currently holds a 40% stake in the San Cristobal oil field and an 11% stake in the Carabobo-1 block. It is now working to take over operatorship of these projects from Venezuela’s state-owned oil company, Petróleos de Venezuela S.A. (PDVSA). According to Agarwal, the company expects to finalise new agreements with Venezuelan authorities and its joint venture partners to facilitate the transition.
Technical Expertise Supports Expansion
ONGC Videsh believes it is well-positioned to operate the Venezuelan assets, as the two onshore projects share geological and operational characteristics with the company’s oilfields in Gujarat, India. This experience is expected to enable the company to efficiently manage production and optimise field performance. “We are very upbeat for Venezuela and believe positive developments will emerge soon,” Agarwal said, expressing confidence in the company’s expansion plans.
Venezuela Opens Oil Sector to Private Operators
The company’s plans coincide with major policy reforms in Venezuela’s oil industry. Last month, the country’s interim government introduced new oil regulations that significantly reduce the long-standing dominance of PDVSA. The reforms allow private companies to participate across the entire oil and gas value chain, including exploration, production, transportation, refining and fuel retailing. In addition, the new framework introduces a risk-based fiscal regime, with taxation linked to the complexity and risk profile of individual oil assets, ranging from mature onshore fields to offshore developments.
Supporting India’s Energy Security
India, the world’s third-largest crude oil consumer, continues to diversify its energy imports while expanding overseas upstream investments to strengthen long-term energy security. Against this backdrop, ONGC Videsh’s proposed expansion in Venezuela aligns with India’s strategy to secure stable crude oil supplies, reduce dependence on traditional suppliers in the Middle East, and mitigate the impact of global oil price volatility. As reported by thehindubusinessline.com, The company is currently engaged in discussions with Venezuelan authorities and its joint venture partners to advance investment plans and complete the transfer of operatorship for the two oil blocks.
