ONGC Gets US Approval To Expand Operations In Venezuela

State-owned Oil and Natural Gas Corp (ONGC) can now operate freely in Venezuela after its overseas arm ONGC Videsh Ltd received a licence from the US Treasury's Office of Foreign Assets Control (OFAC), removing a constraint that had limited the company's Venezuelan activities for years due to sanctions-related risks.

ONGC Director (Finance) Anupam Agarwal confirmed the development at an investor call following the company's first-quarter earnings. He said the sanctions risks are now behind the company, and it has full freedom to work on its Venezuelan projects.

What The Licence Unlocks

The approval could have a direct impact on ONGC Videsh's operations and finances in Venezuela. The key changes include:

• Greater operational freedom at its existing Venezuelan projects.

• Ability to manage project finances and execute new agreements.

• Potential recovery of around $500 to $600 million in pending dividends that had been stranded due to sanctions related restrictions.

• Potential transfer of operatorship of key projects from Venezuela's state oil company, Petroleos de Venezuela S.A. (PDVSA) to ONGC Videsh.

Projects And Production Target

ONGC Videsh holds a 40% stake in the San Cristobal oil project and an 11% interest in the Carabobo project, both operated in partnership with PDVSA. San Cristobal produced approximately 0.265 million tonnes of oil equivalent in FY26, which Agarwal described as roughly one-tenth of its production potential.

The company plans to invest in field operations and raise output from the current 12,000-15,000 barrels per day (bpd) to 30,000 bpd within a year. Venezuela's newly enacted petroleum law also provides additional fiscal incentives for resource development, potentially improving the investment case further.

Why Venezuela

Venezuela holds the world's largest proven crude oil reserves, estimated by OPEC at approximately 303 billion barrels, exceeding Saudi Arabia. Years of underinvestment, sanctions and operational difficulties have kept production well below potential, leaving significant scope for development if the operating environment improves.

Agarwal said Venezuela's shallow onshore fields have geological similarities with ONGC's domestic operations in western India, particularly around Mehsana and Ahmedabad, making the projects compatible with the company's technical expertise. He added that ONGC is very bullish on Venezuela and expects new agreements and a possible operatorship transfer from PDVSA in the near term.

The latest push comes as India seeks to diversify crude oil supplies and strengthen energy security amid ongoing geopolitical disruptions in global energy markets.

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