NEW DELHI — In a major expansion bid within Latin America, India’s state-owned Oil and Natural Gas Corporation (ONGC) is in active corporate negotiations with PDVSA, Venezuela’s state-run petroleum company, to acquire controlling equity stakes in two primary oil-producing blocks, San Cristobal and Carabobo-1.
The targeted buyout aims to clear legal roadblocks and hand comprehensive management over to ONGC’s overseas investment subsidiary, ONGC Videsh Limited (OVL). However, the closing of the deal strictly depends on ONGC securing an official operating waiver from the US Treasury Department’s Office of Foreign Assets Control (OFAC), which continues to maintain strict financial oversight over Venezuelan crude revenue channels and oilfield management.
Redrawing Joint Ventures for Single and Joint Operatorship
ONGC already holds significant minority assets in these fields but has historically been blocked from driving production due to bureaucratic gridlock and strict sanction regimes. The proposed restructuring plans to eliminate PDVSA’s majority control:
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The San Cristobal Field: Currently, OVL controls a 40% participating interest alongside PDVSA’s 60%. ONGC wants to absorb the remainder to act as the sole operator of the block.
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The Carabobo-1 Field: This asset features a fractured ownership structure consisting of PDVSA (71%), OVL (11%), Spain’s Repsol (11%), Indian Oil (3.5%), and Oil India (3.5%). ONGC intends to purchase PDVSA’s shares to serve as a joint operator alongside Repsol.
Unlocking Frozen Dividends and Tripling Field Output
Years of technical underinvestment and infrastructure neglect have caused sharp production drops across both fields. By establishing undisputed operational control, ONGC has laid out an aggressive short-term turnaround blueprint:
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Production Surge Targets: OVL expects to safely ramp up combined field output to 30,000 barrels per day (bpd) within 12 months—a substantial leap from the recent stagnating baseline of 12,000–15,000 bpd. Long-term field upgrades could push daily volumes up to 50,000 bpd.
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Recovering $500 Million in Trapped Capital: Securing the operatorship is the only viable path for the Indian public sector undertaking (PSU) to successfully claw back more than $500 million in stuck dividends that have remained completely frozen inside Venezuela for nearly a decade.
Leveraging the Easing US Sanctions Landscape
ONGC’s regulatory push in Washington comes at a favorable moment, following recent updates by the US Treasury that eased certain licensing conditions for foreign enterprises operating inside Venezuela. Washington has already extended similar specific, long-term operating exemptions to other international oil supermajors, including Chevron, BP, Shell, and Repsol.
As crude shipments flow out of Latin America with greater regulatory freedom, India’s sophisticated domestic refineries have quickly scaled up imports to become primary global buyers. Acquiring these equity barrels would give New Delhi direct, long-term control over its oil supply chain, providing a vital shield against ongoing shipping blockades and geopolitical shocks in West Asia.
