ONGC seeks operatorship of two Venezuelan oil projects within six months
ONGC is pursuing a bigger operating role in Venezuela as it works to unlock value from two oil assets where it is already an investor. The plan could also help the Indian explorer recover more than $500 million in pending dividends and expand its position in additional Venezuelan fields.
Highlights
- ONGC expects to secure operatorship of the San Cristobal and Carabobo 1 Venezuelan oil projects within three to six months, following advanced talks.
- ONGC Videsh has over $500 million in pending dividends from these projects, to be settled with finalized operatorship agreements and potentially expanded field stakes.
- Output at Russia's Sakhalin-1 project, where ONGC holds 20%, averaged 183,000 barrels per day from April to September, maintaining pre-2022 levels.
Talks focus on operatorship and dividend recovery
As reported by Reuters, Oil and Natural Gas Corp said it hopes to secure rights to operate two Venezuelan oil projects within three to six months after advanced talks with Venezuelan and U.S. authorities, according to finance chief Anupam Agarwal on an analyst call Friday.ONGC Videsh, the overseas investment arm of ONGC, has more than $500 million in pending dividends tied to its stakes in the San Cristobal and Carabobo 1 projects. Agarwal said those unpaid dividends will be adjusted once new operatorship agreements are finalized.
Under the proposed arrangement, ONGC would move from being only an investor to operating the projects and marketing their output. Agarwal also said the new structure includes a clause that could allow the company to take stakes in additional Venezuelan fields.
Project structure and broader overseas output
Agarwal said ONGC is expected to obtain full operatorship of the San Cristobal project, where it holds 40% and Venezuelan state oil company PDVSA owns the remainder. In Carabobo, the company is expected to share operatorship with other investors.In the Carabobo project, ONGC and other Indian companies hold an 18% stake, while Spain's Repsol owns 11%.
Agarwal also said output from Russia's Sakhalin-1 project, in which ONGC owns 20%, averages about 183,000 barrels per day in April through September, broadly in line with production levels seen before Russia's 2022 invasion of Ukraine.
Soaring crude oil shipping costs have become a major new factor in the delivered price of oil, as conflict-related risks force tankers to reroute and add higher insurance and risk premiums. Our earlier article explained how these disruptions are pushing freight rates to record levels, squeezing import-dependent markets and refiners while boosting tanker owners’ earnings, with effects that can spill over into broader consumer prices.
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