The Daily Journal.- India’s state-owned Oil and Natural Gas Corporation (ONGC) obtained a license from the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) to fully resume operations in Venezuela, a senior company executive told The Economic Times.
According to the Indian newspaper, the U.S. authorization clears the way for ONGC to “increase production, sign new agreements and take over as operator of some projects that Venezuela’s state-owned oil company Pdvsa currently manages.”
“We now have complete freedom to work on the Venezuela project because we previously limited our operations there due to sanctions-related risks. Those risks are now behind us,” ONGC Finance Director Anupam Agarwal said during an investor call following the release of the company’s first-quarter results.
ONGC Videsh Ltd., the overseas investment arm of the Indian state-owned company, holds a 40% stake in the San Cristóbal oil project in the Orinoco Oil Belt.
The company also holds an 11% stake in the Petrocarabobo-1 project, which remains in the development stage.
According to estimates cited by The Economic Times, the OFAC license would allow the company to manage the finances of its Venezuelan projects and help it recover more than $500 million in pending dividends.
“We are very optimistic about Venezuela,” Agarwal said, adding that the company expects to sign new agreements and that Pdvsa could transfer operating control to ONGC.
ONGC currently produces around 0.265 million metric tons of oil equivalent at the San Cristóbal field, one-tenth of its production potential. The new license will allow the Indian company to invest in the projects and increase crude oil production.
ONGC focuses on shallow onshore fields in Venezuela, where it can apply the relevant operating experience it gained at its western Indian fields, including Mehsana and Ahmedabad, Agarwal explained.
With information from The Economic Times.
