India eyes Venezuela blocks operatorship; regains Russia's Sakhalin-1 stake

NEW DELHI: India’s top explorer, Oil and Natural Gas Corp (ONGC), hopes to soon sign agreements with Venezuela to operate two oil blocks under the South American nation’s new petroleum law, its finance chief said on Wednesday.

State-run ONGC, through its overseas investment arm ONGC Videsh, holds a 40% stake in the San Cristobal field and, along with other Indian companies, an 18% stake in the Carabobo-1 project.

“Now we have full freedom to work on the Venezuela projects. Earlier, we were restricting our operations there because of the sanctions-related risk,” finance director Anupam Agarwal said on an analyst call after the company’s June-quarter earnings.

He said Venezuela was offering additional incentives under its new petroleum law and that ONGC had expertise in operating fields with similar geology in India.

“We believe very soon we will see some positive developments, the new agreements signed, and we are taking over the operatorship for some of those projects from PDVSA,” he said.

Russian Sakhalin-1 asset

Agarwal said ONGC regained its 20% stake in Russia’s Sakhalin-1 oil and gas project in December after a gap of four years.

The restored stake increased the group’s quarterly revenue contribution from the project to about 10 billion Indian rupees ($105.13 million), compared with 5 billion-6 billion rupees earlier, he said.

Russia transferred Sakhalin-1 to a new domestic operator after Western countries imposed sweeping sanctions on Moscow following its invasion of Ukraine in February 2022.

ONGC agreed to make payments into the Sakhalin-1 abandonment fund in roubles using dividends frozen in Russia, allowing it to retain its 20% stake in the project, as Reuters reported last year.