en.Wedoany.com Reported - India's Oil and Natural Gas Corporation (ONGC) is preparing to take over operations of two Venezuelan oil projects from Venezuela's state-owned oil company PDVSA, which would give it direct operational control over some project assets in the country with the world's largest proven crude oil reserves. Affected by U.S. sanctions, ONGC's activities in Venezuela have been restricted for years; following the introduction of Venezuela's new petroleum law, its overseas subsidiary ONGC Videsh has regained the freedom to operate in Venezuela.
ONGC's Chief Financial Officer Anupam Agarwal said during the June quarter earnings call that ONGC Videsh now has "complete freedom" to seek opportunities in Venezuela and expressed confidence in finalizing an agreement to transfer operations of some projects from PDVSA as soon as possible. Currently, ONGC Videsh holds a 40% stake in the San Cristobal oil field and, together with other Indian companies, holds an 18% interest in the Carabobo-1 heavy oil project. Agarwal said Venezuela's new petroleum law provides additional incentives for foreign investors.
"Now we have complete freedom to work on projects in Venezuela. Earlier, we restricted our operations there due to sanctions-related risks," Agarwal said.
ONGC also disclosed that it regained its full 20% stake in Russia's Sakhalin-1 oil and gas project in December. The stake was suspended for four years after Russia restructured the project following Western sanctions. Agarwal said the restoration of the stake doubled Sakhalin-1's quarterly revenue contribution to approximately 10 billion Indian rupees (about $105 million), up from 5 billion to 6 billion Indian rupees. ONGC retained the stake after agreeing to use dividends frozen in Russia to pay decommissioning fund contributions in rubles.
Meanwhile, India's purchases of Venezuelan crude have cooled after surging sharply earlier this year. Kpler data shows Venezuela's crude exports fell 25% in July to approximately 856,000 barrels per day; shipments to India dropped by about half from June, while improved Middle East supply reduced Asian demand for discounted Venezuelan crude.
