ONGC Videsh Ltd (OVL) is close to securing a crucial licence from the US Office of Foreign Assets Control (OFAC), a move that would enable it to resume operations in Venezuela. Rajarshi Gupta, managing director of OVL, confirmed on Friday that the proposal is in the advanced stages of consideration by the US Department of Treasury.
OVL, the overseas arm of India’s state-run ONGC, has sought a ‘specific licence’ similar to one granted to Chevron, which would allow the Indian company to operate in the heavily sanctioned South American nation, Gupta told reporters.
“We are in discussion with the government of Venezuela to take charge of operations of the two projects there in the new model, which we call the Chevron model, as Chevron has been doing. At the same time, we have been interacting with OFAC. They gave us some comfort that yes you can do some operations subject to pre-conditions. We have sought for a specific licence to operate in Venezuela (with the US department of Treasury),” he said.
“That’s in the final stages of consideration as to the best of our understanding.”
Gupta added that OVL is prepared to take over operations in Venezuela immediately upon receiving the necessary approvals. The company is currently negotiating with the Venezuelan authorities to formalize agreements that would grant it operatorship of the San Cristobal and Carabobo projects.
On 30 July, Mint had reported that OVL has sought waiver from US sanctions to resume operations in Venezuela and take possession of oil cargoes that Venezuela has promised in lieu of dividends worth $600 million.
OVL holds a 49% stake in the operational San Cristobal project and 11% in the under-development Carabobo field. While PdVSA had agreed to provide oil instead of cash dividends, the arrangement has been stalled by the sanctions.
This development comes as OVL faces challenges across several of its overseas ventures, including delays at the Mozambique LNG plant and difficulties in repatriating dividends from Russia.
Gupta noted that OVL still maintains a presence in Venezuela with three operational offices and is prepared to ramp up its workforce in the country once the required approvals are in place. Current crude production at the Venezuelan projects stands at 12,000-15,000 barrels per day, but Gupta indicated that output could be scaled up to 45,000-50,000 barrels per day.
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