ONGC Videsh’s (OVL) proposal to extract oil from two oil blocks in Venezuela is pending with the Office of Foreign Assets Control (OFAC) of the US Department of Treasury and is in the advanced stages of consideration.

OVL MD Rajarshi Gupta told reporters that the company has sought a ‘specific licence’ to operate in Venezuela, as Chevron has. OVL has also sought exemptions from the US to resume operations in Venezuela and lift crude in lieu of stock dividends.

“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. That’s in the final stages of consideration as to the best of our understanding,” Gupta said.

OVL is ready to take over the operations of the Venezuelan projects as soon as we receive that information. 

He added that the company is in talks with the Venezuelan government and would have to sign separate agreements for gaining operatorship of both the projects in the Latin American country. 

OVL owns 49 per cent stake in Venezuela’s operational San Cristobal project and 11 per cent in under-development Carabobo. Petróleos de Venezuela, SA, (PdVSA) which operates both, had agreed to give oil to OVL instead of cash dividends; however, this is held up since US sanctions bar transactions involving PdVSA. 

OVL maintains three offices in Venezuela, and once the plans are implemented with the required approvals, it will have to deploy more workforce in the country. 

Currently, the crude production in the Venezuelan projects stands at 12,000-15,000 barrels per day, and it can be enhanced to 45,000-50,000 barrels per day in the next 2-3 years.

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