Source The Hindu
New Delhi, August 16, 2026 — In a major diplomatic and strategic breakthrough, India’s state-owned Oil and Natural Gas Corporation (ONGC) has received a highly anticipated license from the US Treasury’s Office of Foreign Assets Control (OFAC). The regulatory clearance allows ONGC’s overseas arm, ONGC Videsh Ltd (OVL), to resume full operations in Venezuela without the risk of US sanctions, clearing the path to expand production and recover millions in frozen dividends.
The approval gives ONGC the flexibility to manage project finances, inject fresh capital, and negotiate new agreements in the sanction-hit South American nation. Anupam Agarwal, Director of Finance at ONGC, confirmed the development, noting that the sanctions-related constraints that had previously hampered the company’s operations are now behind them, granting OVL “full freedom” to operate.
Currently, ONGC Videsh holds a 40% participating interest in the shallow onshore San Cristobal field and an 11% stake in the Petrocarabobo (Carabobo-1) development block. The remaining stakes in these projects are controlled by Venezuela’s state-run oil company, Petróleos de Venezuela S.A. (PDVSA). With the OFAC waiver in hand, ONGC is actively engaging with Venezuelan authorities to take over the operatorship of these oil blocks from PDVSA.
Taking direct operational control under the US-approved “Chevron model” would be a game-changer for ONGC. The current production from ONGC Videsh’s Venezuelan assets hovers between 12,000 and 15,000 barrels per day. The Indian explorer believes the fields are operating far below their true potential and aims to double the output to 30,000 barrels per day within a year of assuming control. ONGC officials expressed confidence in managing the assets efficiently, noting that the geological and operational characteristics of the Venezuelan blocks closely resemble the company’s existing oilfields in Gujarat.
Crucially, the operational restart and the transition from a passive investor to an active operator will help ONGC resolve a long-standing financial hurdle: the repatriation of stuck dividend payments. The company expects the OFAC license to unlock an estimated $500 million to $600 million in outstanding dividends owed to ONGC Videsh that had been frozen due to the sanctions.
The regulatory approval aligns with recent policy shifts in Venezuela, which have reduced the monopoly of PDVSA and opened the nation’s oil and gas sector to broader participation by private and foreign operators. For India—the world’s third-largest consumer of crude oil—the revival of ONGC’s Venezuelan projects provides a vital avenue to diversify its energy imports, secure equity crude from Latin America, and hedge against the volatility of traditional Middle Eastern suppliers.
