ONGC Gets US Licence To Resume Venezuela Operations

State-run Oil and Natural Gas Corporation (ONGC) has received a licence from the US Treasury’s Office of Foreign Assets Control (OFAC), allowing the company to resume full-scale operations in Venezuela after years of restrictions linked to US sanctions.

The approval is expected to give ONGC greater flexibility to invest in its Venezuelan assets, expand oil production, and negotiate new arrangements with local authorities and partners. ONGC may also take over operatorship of some projects currently managed by Venezuela’s state-owned oil company, PDVSA.

ONGC Videsh Ltd (OVL), ONGC’s overseas investment arm, owns a 40% stake in the San Cristobal oil project, with PDVSA holding the remainder. OVL also has an 11% interest in the Carabobo project, which is currently under development. According to ONGC Director-Finance Anupam Agarwal, the licence removes the sanctions-related risks that had previously forced the company to limit its activities in Venezuela.

ONGC is now engaging with Venezuelan authorities and joint-venture partners regarding both projects. The licence could also facilitate the recovery of more than $500 million in pending dividends from its Venezuelan investments. ONGC plans to boost Venezuelan output, with the San Cristobal project producing approximately 0.265 million tonnes of oil equivalent in FY26, representing only around a tenth of its potential.

Venezuela is particularly important to ONGC because the country possesses the world’s largest proven crude oil reserves, estimated by OPEC at about 303 billion barrels. Years of underinvestment, sanctions, and operational challenges have constrained production, leaving substantial scope for development. Agarwal said Venezuela’s new petroleum law also provides fiscal incentives that could encourage investment in the sector.

ONGC is particularly interested in shallow, onshore fields where its experience in Western India could be useful. The renewed expansion comes as India seeks to diversify overseas energy resources amid geopolitical uncertainty. ONGC believes greater operational involvement in Venezuelan fields could help unlock underdeveloped reserves while strengthening its international oil portfolio.

The licence from OFAC is a significant development for ONGC, allowing the company to increase its presence in Venezuela and tap into the country’s vast oil reserves. With the easing of sanctions-related risks, ONGC is well-positioned to expand its operations in Venezuela and contribute to the country’s oil production growth.

In the long term, ONGC’s increased involvement in Venezuela is expected to have a positive impact on India’s energy security, as the country seeks to reduce its dependence on imported oil. The development is also likely to strengthen ONGC’s position as a major player in the global oil industry, with a significant presence in one of the world’s most oil-rich countries.

Overall, the licence from OFAC is a major milestone for ONGC, marking a new chapter in the company’s operations in Venezuela. With its increased presence in the country, ONGC is poised to play a significant role in shaping the future of Venezuela’s oil industry, while also contributing to India’s energy security and growth.

The move is also expected to have a positive impact on the Indian economy, as ONGC’s increased oil production in Venezuela is likely to lead to increased revenue and job creation. The development is a significant step forward for India’s energy sector, as the country seeks to become a major player in the global oil industry.

In conclusion, the licence from OFAC is a significant development for ONGC, allowing the company to resume full-scale operations in Venezuela and tap into the country’s vast oil reserves. The move is expected to have a positive impact on India’s energy security, the Indian economy, and ONGC’s position as a major player in the global oil industry.