ONGC Moves to Take Over Venezuelan Oilfields, Recover $500 Million

India’s state-owned Oil and Natural Gas Corp. (ONGC) is negotiating to take over operations at two Venezuelan oil projects within six months, a move that could give it control over production and sales at fields where it is owed more than $500 million in dividends.

The company's overseas arm, ONGC Videsh, is in advanced discussions with Venezuelan and U.S. authorities, finance chief Anupam Agarwal told analysts Friday. The company expects agreements to be finalized within three to six months.

ONGC currently holds investments in the San Cristobal and Carabobo 1 projects, although it does not operate them. The proposed agreement would see ONGC operate the fields and market their production, while addressing outstanding dividend payments.

At San Cristobal, ONGC holds 40%, with Venezuela's state oil company PDVSA owning the remaining 60%. ONGC expects full operatorship there.

At Carabobo 1, the arrangement would be shared with other investors. ONGC and other Indian companies hold a combined 18%, while Spain's Repsol has an 11% stake.

The proposed agreements could also allow ONGC to acquire interests in additional Venezuelan fields, Agarwal said. Details of the outstanding dividend settlement have yet to be finalized.

The talks come as Venezuela works to restore an oil industry long constrained by underinvestment and operational problems. Chevron has outlined more than $7 billion in Venezuelan investment over five years, while Eni and Repsol have secured expanded operating roles.

Rystad Energy estimates Venezuela could produce 1.6 million barrels per day by 2028 and 1.8 million bpd by 2030, provided investment and oilfield services expand substantially.

However, rebuilding production capacity remains a considerable challenge.

Only two drilling rigs were active in the country as of August, according to Baker Hughes data cited by Rystad. Roughly 50 would be needed by 2028 to support its production forecast.

By Julianne Geiger for Oilprice.com