India Energy Week 2024: OVL likely to lift more crude from Venezuela

Discussions underway to inject more investments into both of OVL's projects in Venezuela

ONGC Videsh (OVL) is in advanced-level talks with Venezuela to consistently procure crude oil cargoes in lieu of its massive amount of dividends stuck in the country, OVL Managing Director and Chief Executive Officer (CEO) Rajarshi Gupta told reporters on the sidelines of the ongoing 2024 India Energy Week.

The overseas arm of the domestic state-owned exploration and production company Oil and Natural Gas Corporation (ONGC), OVL is also set to put in more investments in its stalled projects in the South American country.

“We have taken crude in lieu of dividends after sanctions were lifted. We are in very advanced discussions with the Venezuelan government to get further cargoes to liquidate our dividends and at the same time, get operatorship of the projects we have there and increase production,” Gupta said.

OVL acquired a 40 per cent stake in the San Cristóbal Field in Venezuela in 2008. Venezuelan state-owned Petróleos de Venezuela, S.A. holds the remaining stake. OVL has said that its dividends of about $600 million from the project are owed to it.

The US had eased sanctions on Venezuela’s oil sector in October 2024. The sanctions were imposed back in 2018 after the Socialist government of Nicolás Maduro returned to power.

“The two projects would need more investments to produce more. It will not be much in US dollar terms. Venezuela has the largest proven reserves of crude oil in the world. Sub-surface investments will get more production,” he said.

Similarly, the company is making headway in its gas project in Mozambique.

“Construction of the liquefied natural gas (LNG) train should start by March 2024. The security situation is much improved. We are in discussions with TotalEnergies to lift the force majeure and start construction soon,” Gupta stressed.

Led by the French energy giant TotalEnergies, the project envisages producing 12.88 million tonnes per annum of LNG from gas discovered in Area 1, in the African country’s offshore areas.

BPRL Ventures Mozambique BV, an overseas subsidiary of Bharat PetroResources, a wholly owned subsidiary of Bharat Petroleum Corporation, holds a 10 per cent participating interest in the Area 1 concession. OVL has a 16 per cent interest while Oil India holds a 4 per cent interest.

OVL is present in 18 nations.

Gupta said OVL is in talks for multiple acquisitions of projects across the world.

“With brand India at its highest, I can call up any CEO in the world, open any door and ask for partnerships," Gupta said.

Higher production

ONGC’s production this year will be better than last year with the commencement of production in the Western offshore deep water area. The company’s KG-98/2 block is set to reach peak production of up to 45,000 barrels of oil per day and 9-10 million metric standard cubic metres per day of gas per day. Both of these together would increase production.

In all other projects, multiple technologies are being deployed to arrest the natural decline of productivity in natural fields and augment production, Gupta said.

ONGC is set to invest Rs 10,000-11,000 crore in domestic exploration annually.

The company has also opened a subsidiary of ONGC in Gujarat’s GIFT City to function as a treasury hub catering to OVL and its 25 subsidiaries, including step-down subsidiaries, across 15 countries. The subsidiary will give it the benefit of having an offshore company within India, Gupta said.