India’s ONGC Targets Tenfold Oil Output Boost in Venezuela

India's state-owned Oil and Natural Gas Corporation ONGC is set to invest approximately $200 million to revitalize the San Cristobal oilfield in Venezuela, according to a report by the Indian Economic Times on Wednesday. The San Cristobal oilfield, jointly operated by ONGC and Venezuelan state oil firm PDVSA, holds significance as ONGC Videsh Ltd (ONGC Videsh) holds a 40% stake in the project, with PDVSA owning the remaining 60%.

This investment is part of ONGC's strategy to significantly increase output at the oilfield in the coming years.

Earlier this month, ONGC secured a license from the U.S. Office of Foreign Assets Control (OFAC), enabling the company to resume operations in Venezuela. This comes at a time when India's largest oil and gas company has been grappling with stringent U.S. sanctions imposed on Venezuela over recent years. ONGC, currently holds an 11% stake in another major oil project, Carabobo, but has had to scale back its activities due to these sanctions.

The $200 million allocated for the San Cristobal project will be finalized once ONGC and PDVSA agree on an investment plan. The Indian firm will also cover PDVSA's portion of the investment, recouping their share through future production from the San Cristobal oilfield. ONGC's ambitious target is to increase output at the San Cristobal oilfield tenfold, ultimately restoring production levels to the previous peak of up to 50,000 barrels per day (bpd), which is ten times the current output of around 4,000-5,000 bpd.

This ambitious goal aims to bring back the oilfield's production to its pre-sanction, pre-mismanagement days, when Venezuela was one of the world's biggest crude oil producers.