ONGC Gets US Licence for Venezuela Operations

Oil and Natural Gas Corp (ONGC), a state-owned Indian oil and gas company, secured a licence from the United States Treasury’s Office of Foreign Assets Control (OFAC) to resume full oil-field operations in Venezuela. The approval covers ONGC’s overseas investment arm, ONGC Videsh Ltd (OVL), and relates to its participation in Venezuelan upstream oil projects.

ONGC’s Venezuelan Assets

ONGC holds a 40% participating interest in the San Cristóbal oil project and an 11% interest in the Carabobo project in Venezuela. The San Cristóbal field produced about 0.265 million tonnes of oil equivalent in FY26, while its estimated production potential is much higher than the level achieved under sanctions and limited investment.

OFAC Licence and Sanctions Context

OFAC is the sanctions office of the US Department of the Treasury and administers economic and trade restrictions under US law. A licence from OFAC permits specified transactions that would otherwise fall under sanctions restrictions, including investment, payments, and operational activity in designated jurisdictions.

Production Plans and Project Control

ONGC has stated plans to raise production in Venezuela from 12,000–15,000 barrels per day to 30,000 barrels per day within one year. The company is also in discussions with Venezuelan authorities to take over project operatorship from Petroleos de Venezuela S.A. (PDVSA), the state-owned oil company of Venezuela.

Frozen Dividends and Overseas Investment Arm

ONGC Videsh Ltd is the overseas investment subsidiary of ONGC and holds foreign oil and gas assets in several countries. The OFAC licence is expected to help recover frozen dividends linked to the Venezuelan projects, with estimates placed between 500 million and 600 million.

Important Facts for Exams

• Venezuela has one of the world’s largest proven crude oil reserves, estimated at about 303 billion barrels.
• Petroleos de Venezuela S.A. is commonly known as PDVSA and is the national oil company of Venezuela.
• OFAC stands for the Office of Foreign Assets Control and functions under the United States Department of the Treasury.
• ONGC Videsh Ltd is the foreign investment arm of Oil and Natural Gas Corp.

Venezuela’s Oil Sector

Venezuela is a major member of the Organisation of the Petroleum Exporting Countries, or OPEC. Its oil sector includes upstream exploration, production, and field development activities in the Orinoco Belt and other petroleum regions.