ONGC gets US licence to resume full Venezuela operations, eyes operatorship

State-owned Oil and Natural Gas Corp (ONGC) has received a licence from the U.S. Treasury's Office of Foreign Assets Control (OFAC), allowing it to fully resume operations in Venezuela after years of restrictions due to sanctions-related risks. The development was announced by Anupam Agarwal, Director (Finance), during an investor call following the company's first-quarter earnings.

The licence removes a key hurdle for ONGC's investments in Venezuela. It may enable the company to expand production, sign new agreements, and potentially take over operatorship of some projects from Venezuela's state oil company PDVSA. Mr. Agarwal said the company now has full freedom to work on the Venezuela project, as earlier restrictions were due to sanction risks, which are now behind them.

ONGC's overseas investment arm, ONGC Videsh Ltd (OVL), holds a 40% interest in the San Cristobal oil project, with PDVSA holding the remainder. It also has an 11% stake in the Carabobo project, which is under development. The licence will enable the company to manage the finances of its Venezuelan projects and help recover a pending dividend of over $500 million.

ONGC is already in talks with Venezuelan authorities and joint-venture partners over its interests in San Cristobal and Carabobo. It expects positive developments soon, including new agreements and a possible transfer of operatorship from PDVSA. The licence is significant because U.S. sanctions on Venezuela's oil sector had for years complicated financial transactions, investment, and operations involving Venezuelan crude and energy assets. Consequently, the company had curtailed activity despite its long-standing presence in the country.

With the licence, ONGC can now invest in the projects to raise oil production. San Cristobal produced around 0.265 million tonnes of oil equivalent in FY26, which is roughly a tenth of its production potential. Mr. Agarwal noted that the company can now invest to increase output.

Venezuela is strategically important for ONGC because it holds the world's largest proven crude oil reserves, estimated by OPEC at about 303 billion barrels, more than Saudi Arabia. However, years of underinvestment, sanctions, and operational difficulties have constrained production, leaving substantial scope for additional development.

Mr. Agarwal said Venezuela's newly enacted petroleum law provides additional fiscal incentives for resource development, potentially improving the investment environment for foreign oil companies and their local partners. ONGC's focus is on shallow, onshore fields in Venezuela, where it has relevant operating expertise from its domestic fields in Western India, including Mehsana and Ahmedabad.

The company is bullish on Venezuela and expects to see new agreements and potentially take over operatorship of some projects from PDVSA in the near term. OVL had invested in Venezuelan oil assets through joint ventures, but sanctions imposed by Washington had periodically restricted the scope of operations and dealings with PDVSA.

This renewed push comes as India seeks to secure overseas oil resources and diversify its supply base amid heightened geopolitical risks. For ONGC, greater operational control over Venezuelan fields could give the company a larger role in unlocking some of the world's biggest underproduced hydrocarbon resources.