India's ONGC Plans to Take Over Operations of Two Venezuelan Oilfields Within Six Months

en.Wedoany.com Reported - On November 6, Anupam Agarwal, Chief Financial Officer of India's Oil and Natural Gas Corporation (ONGC), said during a quarterly earnings conference call that its overseas subsidiary ONGC Videsh is advancing negotiations with the Venezuelan government, Petróleos de Venezuela, S.A. (PDVSA), and project partners on adjusting the operating rights of two oilfields, with the relevant agreements expected to be completed within the next 3 to 6 months. The projects involved are the San Cristobal oilfield and the PetroCarabobo heavy oil project, and the company plans to obtain independent operating rights and joint operating rights, respectively.

Under the proposed arrangement, ONGC Videsh is expected to become the sole operator of the San Cristobal oilfield. ONGC Videsh currently holds a 40% interest in the project, with PDVSA holding the remaining 60%. The PetroCarabobo project involves Spain's Repsol and other Indian investors, and ONGC plans to participate in joint operations of the project by reaching new operating arrangements with existing partners.

Agarwal said the company has obtained the relevant approvals and licenses from the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) needed to proceed with the new operating arrangements, and is working with the Venezuelan government and partners to finalize the terms of the agreements. The new operating model is planned to grant ONGC Videsh the rights to crude oil extraction, sales, and revenue management, with the company bearing corresponding taxes and other fiscal obligations and distributing remaining proceeds in accordance with the agreements.

ONGC Videsh has more than US$500 million in historical dividends yet to be recovered from the above two Venezuelan projects. Agarwal noted that in the past, the right to sell crude oil from the projects was controlled by PDVSA, and the relevant proceeds could not be repatriated normally. The company is studying ways to address the historical arrears through new operating agreements or separate settlement arrangements, while incorporating crude oil sales and fund recovery mechanisms into the new operating model.

ONGC management stated that negotiations on the rights and interests of both parties, specific operating terms, and subsequent capital investment are still ongoing. The company plans to take over operations of the relevant oilfields after the agreements are signed and to carry out crude oil production and sales activities under the new arrangements.