State-owned Oil and Natural Gas Corp (ONGC) has officially confirmed that its overseas arm ONGC Videsh (OVL) received the required approval from the US government in July 2026 to resume oil and gas operations in Venezuela. According to ONGC's clarification to stock exchanges on August 18, 2026, OVL had been pursuing license authorisation from the US Office of Foreign Assets Control (OFAC) for operations in the country. "The required go ahead was received from US Govt. in July, 2026," the company stated. As reported by CNBC TV18, this development removes a key hurdle for ONGC's Venezuelan investments and could pave the way for the state-run explorer to expand production, sign new agreements and take over operatorship of some projects from Venezuela's state oil company PDVSA. However, ONGC noted that no material price movement or financial impact yet has been assessed following the development.
ONGC has outlined ambitious production targets for its Venezuelan operations, planning to raise oil output from approximately 12,000-15,000 barrels per day to 30,000 barrels per day within a year. The company's overseas investment arm, ONGC Videsh Ltd (OVL), currently holds a 40 per cent interest in the San Cristobal oil project, while the remaining stake is with Venezuela's Petroleos de Venezuela S.A. (PDVSA). It also holds another 11 per cent stake in the Carabobo project, which is under development. The San Cristobal project produced around 0.265 million tonnes of oil equivalent in FY26, representing only a tenth of its production potential. As reported by CNBC TV18, framework agreements for the further course of action in both assets are currently under discussion with relevant stakeholders.
The license enables ONGC to manage the finances of its Venezuelan projects and help recover between $500 million and $600 million in pending dividends that have remained stranded because of sanctions-related restrictions. According to CNBC TV18, ONGC is already in discussions with Venezuelan authorities and its joint-venture partners over its interests in both projects and expects positive developments soon, including new agreements and a possible transfer of operatorship from PDVSA. The development could pave the way for OVL to advance discussions concerning its Venezuelan assets, subject to the applicable regulatory approvals and completion of framework arrangements with relevant stakeholders. The renewed push into Venezuela comes as India seeks to secure overseas oil resources and diversify its supply base amid heightened geopolitical risks.
Venezuela is strategically important for ONGC because it holds the world's largest proven crude oil reserves, estimated by OPEC at about 303 billion barrels, more than Saudi Arabia. As reported by CNBC TV18, Agarwal noted that Venezuela's shallow onshore fields have geological similarities with ONGC's domestic operations in western India, including fields around Mehsana and Ahmedabad, making the projects compatible with the company's technical expertise. The company's focus is on shallow, onshore fields in Venezuela, where it has relevant operating expertise from its domestic fields. Venezuela's newly enacted petroleum law provides additional fiscal incentives for resource development, potentially improving the investment environment for foreign oil companies and their local partners. Much of the country's production potential remains constrained by years of underinvestment, sanctions, and operational difficulties, leaving substantial scope for additional development.
ONGC reported strong financial results for Q1 FY27, with standalone net profit more than doubling sequentially to ₹17,034 crore for the quarter ended June 30, 2026, compared with the CNBC-TV18 poll estimate of ₹13,787 crore. According to CNBC TV18, revenue from operations rose 29.3% quarter-on-quarter to ₹46,461 crore, while Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) surged to ₹28,355 crore, ahead of the Street estimate of ₹27,482 crore. The EBITDA margin expanded to 61% from 35.3% in the previous quarter and was above the Street estimate of 59%. The higher share of premium-priced new well gas was a key contributor to earnings, with new well gas generating ₹3,998 crore in revenue during the quarter and accounting for around 38% of revenue from ONGC's nomination gas portfolio, delivering an additional ₹1,897 crore compared with the Administered Price Mechanism (APM) gas price.
