Oil and Natural Gas Corp (ONGC) is reportedely in discussions with Venezuela’s state-owned oil producer PDVSA to purchase either a portion or all of its holdings in two oilfields located in the South American country.Venezuela’s oil industry has witnessed a prolonged decline due to a combination of depressed oil prices, economic mismanagement and US sanctions. During this period, PDVSA’s operational capabilities have also weakened considerably.Following the imposition of US oversight on Venezuela’s oil sector and the subsequent easing of sanctions, Venezuelan crude has increasingly returned to international markets, with India emerging as one of its major buyers.Through its overseas subsidiary, ONGC Videsh, the Indian company currently owns a 40% participating stake in the San Cristobal oilfield, while PDVSA holds the remaining interest. In the Carabobo-1 project, ONGC Videsh has an 11% stake, with Indian Oil and Oil India each owning 3.5%. Spain-based Repsol holds 11%, while PDVSA controls the remaining 71%.People familiar with the discussions told ET that any acquisition would depend on ONGC obtaining a licence from US authorities permitting it to operate the two fields.Since Venezuelan President Nicolas Maduro was taken into custody in January, the United States has exercised effective oversight of Venezuela’s oil industry. As a result, foreign companies are required to secure US approval before operating oilfields or handling crude sales and related revenues.According to the sources, ONGC has been engaging with the US Treasury Department to obtain the necessary permissions. Similar licences have already been granted to several global energy companies, including Chevron, BP, Shell and Repsol, allowing them to conduct operations in Venezuela.The company is seeking to become the sole operator of the San Cristobal field and to share operational control of Carabobo-1 with Repsol, the report said.ONGC has earlier indicated its readiness to make significant investments in both assets but has consistently sought greater authority over operational decisions and financial management. Acquiring PDVSA’s stakes, subject to securing the required US licence, would help the company achieve those objectives.Both the San Cristobal and Carabobo oilfields have experienced significant declines in production, reflecting the wider deterioration of Venezuela’s oil sector. Current output levels from the two assets could not be independently confirmed.In 2024, ONGC approached US authorities seeking sanctions-related approvals that would allow it to operate the fields. At the time, Venezuela had agreed in principle to transfer operational control of the assets to ONGC, although no formal agreements had been executed, ONGC Videsh Managing Director Rajarshi Gupta said in August 2024.Gupta had said that once ONGC took over operations, production from the two fields could increase from the then level of 12,000-15,000 barrels per day to around 30,000 barrels per day within a year.He had also indicated that output could subsequently rise to 45,000-50,000 barrels per day over the following years. Such an increase would also support efforts to recover more than $500 million in dividend payments that have remained pending for several years.Earlier, in 2017, PDVSA had proposed selling an additional 9% stake in the San Cristobal field to ONGC. The Indian company chose not to proceed with the purchase, prioritising the recovery of dividend dues from the project before considering any increase in ownership.
