ONGC gets US licence to resume full Venezuela operations
State-owned Oil and Natural Gas Corp (ONGC) has secured a licence from the US Treasury’s Office of Foreign Assets Control (OFAC), allowing it to resume full operations in Venezuela after years of limited activity because of sanctions-related risks, a senior company official said.
The US approval removes a key hurdle for ONGC’s Venezuelan investments and could pave the way for the State-run explorer to expand production, sign new agreements and take over operatorship of some projects from Venezuela’s State oil company PDVSA, Anupam Agarwal, director-finance at ONGC, said at an investor call after the first-quarter earnings announcement.
“Now we have full freedom to work on the Venezuela project because earlier we were restricting our operations there because of the sanction-related risks. Those risks are behind us,” Agarwal said.
ONGC Videsh Ltd, the company’s overseas investment arm, holds a 40 per cent interest in the San Cristobal oil project, while the remaining is with Venezuela’s Petroleos de Venezuela SA (PDVSA).
It holds another 11 per cent stake in the Carabobo project, which is under development.
An OFAC license would enable the company to manage the finances of its Venezuelan projects and help it recover a pending dividend of more than $500 million.
ONGC is already in talks with Venezuelan authorities and its joint-venture partners over its interests in two projects — San Cristobal and Carabobo — and expects positive developments soon, including new agreements and a possible transfer of operatorship from PDVSA, he said.
The licence is significant for ONGC because US sanctions on Venezuela’s oil sector have for years complicated financial transactions, investment and operations involving Venezuelan crude and energy assets. The company had therefore curtailed activity despite its longstanding presence in the country.
The company can now invest in projects to raise oil production. San Cristobal produced around 0.265 million tonnes of oil equivalent in FY26. This is a 10th of the production potential, and the OFAC license means it can invest in raising output.
Venezuela is strategically important for ONGC because it holds the world’s largest proven crude oil reserves, estimated by OPEC at about 303 billion barrels, more than Saudi Arabia. Much of the country’s production potential remains constrained by years of underinvestment, sanctions and operational difficulties, leaving substantial scope for additional development.
Agarwal said Venezuela’s newly enacted petroleum law provides additional fiscal incentives for resource development, potentially improving the investment environment for foreign oil companies and their local partners.
ONGC’s focus is on shallow, onshore fields in Venezuela, where it has relevant operating expertise from its domestic fields in Western India, including Mehsana and Ahmedabad, Agarwal said.
The company sees the projects as a natural fit with its existing capabilities and is now seeking to accelerate development after the easing of sanctions-related constraints.
“We are very bullish for Venezuela,” Agarwal said, adding that ONGC expects to see new agreements and potentially take over operatorship of some projects from PDVSA in the near term.
OVL invested in Venezuelan oil assets through joint ventures, but sanctions imposed by Washington on Venezuela’s oil sector have periodically restricted the scope of operations and dealings with PDVSA.
The renewed push into Venezuela comes as India seeks to secure overseas oil resources and diversify its supply base amid heightened geopolitical risks.
For ONGC, greater operational control over Venezuelan fields could also give the company a larger role in unlocking some of the world’s biggest undeveloped and underproduced hydrocarbon resources.
