"ONGC Videsh Close to Securing Approval for Oil Operations in Venezuela"

ONGC Videsh (OVL) is nearing approval from the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) to extract oil from two blocks in Venezuela. The proposal is in the advanced stages of consideration as the company seeks a specific license to operate under a model similar to Chevron's.

OVL Managing Director Rajarshi Gupta informed reporters that the company has requested exemptions from the U.S. to resume operations in Venezuela and to lift crude in lieu of stock dividends. "We are in discussions with the Venezuelan government to take charge of operations for the two projects under what we call the Chevron model. OFAC has indicated that we may proceed with certain operations under pre-conditions, and our request for a specific license is in the final stages of review," Gupta said.

OVL is prepared to take over operations of the Venezuelan projects as soon as approval is granted. Gupta added that separate agreements would need to be signed with the Venezuelan government for gaining operatorship of both projects.

OVL holds a 49% stake in Venezuela’s operational San Cristobal project and an 11% stake in the under-development Carabobo project. Petróleos de Venezuela, SA (PdVSA), which currently operates both projects, had agreed to provide oil to OVL instead of cash dividends, but this arrangement has been stalled due to U.S. sanctions that prohibit transactions involving PdVSA.

OVL maintains three offices in Venezuela and will need to increase its workforce in the country once the required approvals are secured. Currently, the Venezuelan projects produce 12,000-15,000 barrels of crude oil per day, with the potential to increase output to 45,000-50,000 barrels per day over the next 2-3 years.

HBL