ONGC's overseas investment arm ONGC Videsh (OVL) has successfully secured operatorship rights for both San Cristobal and PetroCarabobo projects in Venezuela. According to latest reports from Livemint, the company expects to be the sole operator for San Cristobal and joint operator for PetroCarabobo within the next 3-6 months. OVL had been in advanced talks with the Venezuelan government and US authorities regarding these potential acquisitions, with discussions now at an advanced stage and necessary approvals secured. During an analyst call following Q2 financial results, ONGC's finance head Anupam Agarwal confirmed the arrangement is likely to be finalised in three to six months.
The new structure will provide OVL with significantly greater operational control over Venezuelan oil assets compared to its current arrangements. As reported by Livemint, the proposed agreements would give OVL — previously only an investor — greater control over field operations, production, marketing and handling of revenues. Under the new arrangement, the Indian company would operate the projects and sell its output directly, representing a major shift from existing frameworks where PDVSA has exercised operational control. The enhanced control will allow OVL to update and sell production directly rather than relying on existing arrangements that limited commercial contribution.
OVL's Venezuelan investments have been constrained by approximately $500 million in outstanding historical dividends from Venezuela. According to Livemint, Anupam Agarwal confirmed that the pending dividend from the two projects will be adjusted after the new operatorship agreements are finalised. This resolution of long-standing financial obligations is expected to improve the commercial viability of the Venezuelan ventures and enhance the overall return on investment for OVL. The new arrangement also includes a clause that could allow ONGC to take stakes in more Venezuelan fields.
The ownership structure of the Venezuelan projects shows OVL's significant stakes in both developments. As reported by Livemint, OVL currently holds a 40% participating interest in San Cristobal project through a joint venture with PDVSA, while for PetroCarabobo, the company holds an 11% stake alongside other investors. In the Carabobo project, ONGC and other Indian companies hold an 18% stake while Spain's Repsol has 11%. The new operatorship agreements will transform OVL from a passive investor to an active operator, providing the company with direct control over production and revenue generation.
