Now Reading: ONGC to invest $200 million to revive Venezuela oilfield
-
01
ONGC to invest $200 million to revive Venezuela oilfield
Oil and Natural Gas Corp (ONGC) plans to invest about $200 million to revive output at its San Cristobal oilfield in Venezuela, which has dropped to 4,000-5,000 barrels per day from a…
Oil and Natural Gas Corp (ONGC) plans to invest about $200 million to revive output at its San Cristobal oilfield in Venezuela, which has dropped to 4,000-5,000 barrels per day from a peak of 45,000-50,000 barrels due to US sanctions and poor management by state firm PDVSA. Its overseas arm ONGC Videsh has secured a US licence and is finalising an investment plan with PDVSA, which owns a 60% stake to ONGC's 40%.
ONGC will also fund PDVSA's share of the investment and recover it from future output. Once production revives, the company aims to recover over $500 million in stuck dividends from Venezuela. ONGC has yet to finalise any investment plan for the neighbouring Carabobo-1 field, where it holds an 11% stake.
Indian Opinion Analysis
The deal is ONGC's most significant push to unlock value from its Venezuelan assets, where it has nearly $3.5 billion in stuck dividends and dues from past investments. US sanctions had effectively frozen ONGC's ability to repatriate earnings or reinvest, but a Trump-era licence, periodically renewed, now allows limited operations. The challenge is operational: PDVSA's infrastructure has decayed for years, and reviving a field to 50,000 barrels per day requires sustained technical and security support in a country still under US sanctions pressure. ONGC's model of funding PDVSA's share and recovering it from future output is similar to deals Indian firms struck in Sudan and South Sudan, where returns depended on stable local partnerships. The next milestone will be the investment plan's final approval from PDVSA and the licence's renewal terms under the Biden administration, which could change if US policy towards Venezuela shifts again.
Source: energy.economictimes.indiatimes.com
This brief was synthesised by AI from the source linked above.
