OVL looking to operate oil projects in Venezuela after US lifts sanctions

OVL acquired 40% in San Cristobal Project in Venezuela in 2008, with PdVSA owning the balance 60%. (Photo: Reuters)
OVL acquired 40% in San Cristobal Project in Venezuela in 2008, with PdVSA owning the balance 60%. (Photo: Reuters)

Summary

  • The company would invest further in the existing projects in Venezuela in a bid to increase production

BETUL (GOA) : With US sanctions on Venezuela lifted, state-run ONGC Videsh Ltd (OVL) is in talks with the Venezuelan government for operating two oil and gas projects in the country, said Rajarshi Gupta, managing director of the company.

OVL currently owns 40% stake in the San Cristobal project, a producing asset, and 11% in Carabobo, which is under development.

The MD said the company would invest further in the existing projects in Venezuela in a bid to increase production. He also said the company is awaiting cargoes from Venezuela in lieu of stuck dividends.

Mint earlier reported that OVL is in talks with its Venezuelan partner PdVSA to secure oil cargoes in lieu of unpaid dividends totalling $600 million.

“The lifting of the sanctions is a very positive sign. We are in very advanced discussions with the government of Venezuela to get further cargoes to liquidate our dividends and at the same time to get the operatorship of the two projects that we have there and increase the production from there. The two projects we will have to invest to get more production. That’s still being worked out," Gupta said. “We will have to invest, because Venezuela has the largest reserves in the world. So, if we invest more, we will get more production."

Currently OVL and PdVSA jointly operate the projects and going forward the company expects to have “more say" in the projects.

The overseas arm of Oil and Natural Gas Corporation (ONGC)—OVL—acquired 40% in San Cristobal Project in Venezuela in 2008, with PdVSA owning the balance 60%. ONGC Videsh holds 40% through ONGC Nile Ganga (San Cristobal) BV, a wholly owned subsidiary of ONGC Nile Ganga B.V.

The Carabobo project is part of a consortium which also includes Indian Oil Corporation, Oil India, Repsol YPF (Repsol) and Petroliam Nasional Berhad (PETRONAS).

The consortium has about 40% ownership interest in an ‘Empresa Mixta’ (mixed public, private) company for developing the Carabobo-1 project, where OVL holds 11% stake through its subsidiary Carabobo One AB, registered in Sweden. The remaining stake is owned by Corporacion Venezolana del Petroleo (CVP), a subsidiary of Petroleos de Venezuela S.A. (PdVSA), Venezuela’s state oil company.

Speaking about the Mozambique LNG project which has been under force majeure since 2021, he said construction is expected to resume during the ongoing quarter.

Indian oil and gas PSUs hold a combined 30% stake in the Cabo Delgado LNG project in Mozambique.

The $20 billion ‘Offshore Area 1’ project has been under force majeure since April 2021 following attacks by Islamic State terrorists in the coastal town of Palma in Cabo Delgado province. Given the fragile security situation, the TotalEnergies-operated Mozambique LNG had been put under force majeure.

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