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

India's State-run Oil and Natural Gas Corporation (ONGC) has obtained a U.S. license to resume operations in Venezuela, according to recent reports from Indian media. The oil giant holds a 40% stake in the San Cristobal oil project and an 11% stake in the Carabobo project, both in Venezuela. However, ONGC had to scale back its activities due to numerous U.S. sanctions imposed on the South American nation.

The return of ONGC to Venezuela could potentially grant access to over $500 million in unpaid dividends from their stakes in these two oil projects. Presently, ONGC is engaged in discussions with Venezuela's government, which might culminate in new partnership agreements, potentially seeing ONGC take over the operations of San Cristobal and Carabobo, the latter being in the development phase.

ONGC's finance director confirmed in early May that the company's overseas unit, ONGC Videsh, now enjoys unrestricted access to Venezuelan opportunities, following the relaxation of sanctions. Additionally, Anupam Agarwal, a senior executive at ONGC, expressed optimism about finalizing agreements that will transfer the operatorship of certain projects from Venezuela's state-owned oil company PDVSA.

India has been increasing its crude imports from Russia, Brazil, Venezuela, Africa's Nigeria and Angola to replace lost Middle Eastern oil supplies following the ongoing blockade of the Strait of Hormuz.

Venezuela, the world's third-largest oil importer, has stepped up its purchases from Africa's export majors, Nigeria and Angola, to meet its demand. India relies heavily on crude imports, with consumption accounting for up to 90% of total energy needs. In May, India became Venezuela's second-largest buyer of crude, purchasing 427,000 barrels daily, a twofold increase compared to April's volumes.

Experts predict that Venezuela's total crude exports could reach 1.5 million barrels daily by 2027, up from 1.25 million barrels in May. ONGC's return to Venezuela could play a significant role in accelerating this growth.