Oil and Natural Gas Corporation of India (ONGC) is negotiating to acquire operations of two oil projects in Venezuela. These negotiations, according to Anupam Agarwal, CFO of ONGC, are ongoing with Venezuelan and American officials and could transfer control of production and sales of fields that owe more than $500 million to the company.
Details of the Projects and ONGC's Stake
ONGC, which operates internationally through its subsidiary ONGC Videsh, currently has investments in the San Cristobal and Carabobo 1 projects, although it does not currently operate these projects. According to the proposed agreements, ONGC expects to gain control of the operations of these fields and sell their production.
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In the San Cristobal field, ONGC holds a 40% stake while the state-owned oil company of Venezuela (PDVSA) holds the remaining 60%. ONGC expects to fully acquire this field. In the Carabobo 1 field, the agreement will be in partnership with other investors. ONGC and other Indian companies collectively hold 18% of this field, while the Spanish company Repsol holds an 11% stake.
Challenges and Future Prospects
The proposed agreements could also allow ONGC to invest in additional oil fields in Venezuela. However, details regarding the settlement of profit debts have not yet been finalized. Currently, Venezuela is struggling to revive its oil industry, which has faced challenges due to a lack of investment and operational issues. For example, Chevron has planned to invest over $7 billion in Venezuela over the next five years, while companies Eni and Repsol have secured expanded operational roles.
Rystad Energy statistics indicate that Venezuela could produce 1.6 million barrels of oil per day by 2028, with this figure increasing to 1.8 million barrels per day by 2030, provided that investments and oil field services are significantly expanded. However, rebuilding production capacity remains a significant challenge. According to data from Baker Hughes, only two drilling rigs were active in the country as of August, and around 50 drilling rigs are needed to support the 2028 production forecasts.
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