Venezuela to clear OVL dues in instalments

Paid $88 mn in the months from December to March out of pending dues of above $535 mn, says OVL MD

State-run ONGC Videsh Ltd expects Venezuela state oil firm Petroleos de Venezuela to pay off dividend dues of $537.6 million within three years. As part of a deal signed with India last year, the Latin American major has so far paid $88 million in four instalments to the ONGC subsidiary. 

The cash-strapped nation, which holds one of the world’s biggest oil reserves, has been unable to pay to its foreign partners because of a drop in crude oil prices and diversion of funds to social programme and fuel subsidies. 

OVL, which has 40 per cent stake in San Cristobal field, did not receive any dividend since 2009, even though it has invested $486.7 million till March 31, 2016. According to reports, dividend dues from 2009 to 2013 only stood at $537.6 million. OVL Managing Director N K Verma said, “As part of the agreement executed last year, we have already received around $88 million in the months from December to March out of the pending dues of above $535 million.” 

As part of a deal signed last year, OVL had agreed to provide $318 million financing to help raise output at a Venezuelan oilfield, while the OPEC nation signed pact to supply 17,000 barrels per day of crude oil to India to clear past dues. The financing was to help PDVSA to improve production to the range of 35,000 barrels per day (bpd) from about 20,000 bpd. 

“Under the contract, PDVSA has allocated a fixed volume of oil per day for us and sales proceeds of this are coming to us and we are investing in the project to improve the production.  It is a three year programme and if we are able to increase the productions or if oil prices go up, it may happen earlier,” Verma added.  

The Latin American nation is India’s fourth largest source of crude oil, supplying about 24 million tonne per annum. OVL’s San Cristobal project covers an area of 160.18 square kilometers in the Zuata Subdivision of proliferous Orinoco Heavy Oil belt in Venezuela. The comapny’s share of production from the field has dropped by nine per cent from 0.645 MT in 2014-15 to 0.585 MT in 2015-16. This comes at a time, when OVL’s overall production has zoomed to 40.9 per cent from 8.92 MT in 2015-16 to 12.57 MT in 2016-17.