Oil and Natural Gas Corporation (ONGC) is reportedly in discussions with Venezuelan state-owned oil producer PDVSA to buy a part or all of its stake in two oil fields located in the South American country.
PDVSA’s operational capabilities have also weakened significantly.
Venezuela’s oil industry has seen a long-term decline due to a combination of low oil prices, economic mismanagement, and US sanctions. During this period, PDVSA’s operational capabilities have also weakened significantly.
Following the imposition of US surveillance on Venezuela’s oil sector and subsequent easing of sanctions, Venezuelan crude oil has rapidly returned to international markets, and India has emerged as one of its major buyers.
Through its overseas subsidiary, ONGC Videsh, the Indian company currently holds a 40% participating stake in the San Cristobal oilfield, while PDVSA holds the remaining stake. ONGC Videsh holds an 11% stake in the Carabobo-1 project, while Indian Oil and Oil India hold 3.5% each.
Spain-based Repsol holds an 11% stake, 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 allowing it to operate the two fields. Since the detention of Venezuelan President Nicolas Maduro in January, the United States has maintained effective surveillance of Venezuela’s oil industry. As a result, foreign companies are required to obtain U.S.
approval before they can operate oil fields or handle crude oil sales and related revenues. Sources indicate that ONGC is currently negotiating with the US Treasury Department to secure the required permissions. Several global energy companies, including Chevron, BP, Shell and Repsol, have already been granted similar licenses, allowing them to operate in Venezuela. T
The company wants to become the sole operator of the San Cristobal field and share operational control of Carabobo-1 with Repsol, the report said. ONGC has previously indicated its readiness to make significant investments in both assets but has consistently sought greater authority over operational decisions and financial management.
Subject to securing the necessary US licenses, acquiring PDVSA’s stake will help the company achieve those objectives. Both the San Cristóbal and Carabobo oil fields have experienced significant declines in production, reflecting the broader decline of Venezuela’s oil sector.
Current production levels from both assets could not be independently confirmed. In 2024, ONGC approached US authorities for sanctions-related clearance that would allow it to operate the fields. Rajarshi Gupta, managing director of ONGC Videsh, said in August 2024 that at that time, Venezuela had agreed in principle to transfer operational control of the assets to ONGC, although no formal agreement had been signed.
Gupta had said that once ONGC took over operations, production from both fields could increase from the current level of 12,000-15,000 barrels per day to around 30,000 barrels per day within a year.
He also indicated that production could increase to 45,000-50,000 barrels per day in the coming years. Such an increase would also aid efforts to recover more than $500 million in dividend payments that have been pending for several years. Earlier, in 2017, PDVSA had proposed to sell an additional 9% stake in the San Cristobal field to ONGC.
The Indian company decided not to proceed with the purchase, preferring the recovery of dividend dues from the project before considering any increase in ownership.
