Oil and Natural Gas Corp intends to sign agreements with Venezuela to operate two oil blocks under the South American country's recently introduced petroleum law, the company's finance director said on Wednesday.
ONGC, via its overseas investment subsidiary ONGC Videsh, currently holds a 40% stake in the San Cristobal field and an 18% stake in the Carabobo-1 project alongside other Indian firms. Those existing stakes form the basis for the company's plans to take a more active role in the Venezuelan projects.
Speaking on an analyst call following the company's June-quarter earnings, finance director Anupam Agarwal said the firm now has "full freedom to work on the Venezuela projects. Earlier, we were restricting our operations there because of the sanctions-related risk."
"Now we have full freedom to work on the Venezuela projects. Earlier, we were restricting our operations there because of the sanctions-related risk," Anupam Agarwal said.
Agarwal also told analysts that Caracas is offering additional incentives under its new petroleum law, and he emphasized ONGC's operating experience in fields with geology comparable to the Venezuelan assets.
"We believe very soon we will see some positive developments, the new agreements signed, and we are taking over the operatorship for some of those projects from PDVSA," he added.
The comments outline a shift in ONGC's approach to Venezuela, where earlier concerns tied to sanction exposure had led the company to limit on-the-ground activity. Under the revised legal framework and the incentives Agarwal referenced, ONGC plans to move from a passive stakeholder toward active operatorship on at least some projects.
The company pointed to its technical capability to manage fields that share similar geological characteristics with ONGC's Indian operations. Beyond the technical assertion, Agarwal's remarks highlight a timetable expectation that agreements and operator transfers will materialize in the near term, though he did not provide specific dates.
The developments bear on the energy sector and on-market participants with exposure to Indian and Venezuelan oil assets, given potential operational and financial implications if operatorship transfers proceed as described.
What we know:
- ONGC plans to sign agreements to operate two oil blocks in Venezuela under the new petroleum law.
- ONGC Videsh holds 40% of San Cristobal and 18% of Carabobo-1 alongside other Indian companies.
- Finance director Anupam Agarwal said the company had previously limited operations because of sanctions-related risk but now expects positive developments, including taking operatorship from PDVSA.