Indian Oil Giant Secures U.S. License to Return to Venezuela

India’s Oil and Natural Gas Corporation (ONGC) has been granted a license by the U.S. Office of Foreign Assets Control, allowing the company to resume operations in Venezuela, according to Indian media reports. ONGC, the country’s largest oil and gas company, holds a 40% stake in the San Cristobal oil project and an 11% stake in the Carabobo project.

However, its activities were significantly curtailed due to numerous U.S. sanctions imposed on Venezuela. The return to Venezuela could potentially unlock over $500 million in dividends from ONGC’s stakes in the two oil projects. ONGC’s finance director recently confirmed to Reuters that the company’s overseas arm, ONGC Videsh, is now free to pursue opportunities in Venezuela following the loosening of sanctions-related restrictions.

Venezuela’s recently enacted petroleum law offers additional incentives for foreign investors, and ONGC’s finance director expressed confidence that agreements transferring operatorship of some projects from Petróleos de Venezuela, S.A. (PDVSA) could be finalized soon. As the world's third-largest oil importer, India has been increasing its crude purchases from Russia, Brazil, and Venezuela to compensate for the loss of Middle Eastern supply amid the ongoing blockade of the Strait of Hormuz.

With imports making up as much as 90% of India's consumption, the country has become a significant buyer of Venezuelan crude, purchasing 427,000 barrels daily in May, a twofold increase from April volumes. Kpler predicts that Venezuela's total exports will reach 1.5 million barrels daily by 2027, up from 1.25 million barrels daily in May.