The top management of ONGC Videsh Limited (OVL) announced on Friday that the business is at an advanced stage of talks with the US, Venezuela, and Russia to regain control of its projects that are blocked in those countries.
In order to regain operatorship of its operations in Venezuela, which is under sanctions, the international branch of the domestic state-owned exploration and production company, ONGC, OVL, has asked for a specific permit from US authorities. In order to regain control of the Sakhalin-1 field, it is also attempting to reimburse Russia in Russian roubles for its portion of a crucial fund.
Rajarshi Gupta, managing director and chief executive officer of OVL, stated, “We are in advanced stages of discussions with the US State Department and Office of Foreign Assets Control (OFAC) to receive a licence to exempt it from sanctions and work in Venezuela using US entities and the US dollar.”
After the ONGC held its annual general meeting here, he was speaking at a press conference.
In 2008, OVL purchased a forty percent share in San Cristobal Field located in Venezuela. The remainder is owned by PDVSA, a state-controlled company in Venezuela. According to OVL, it is due dividends from the project totalling approximately $600 million.
In October 2023, the US loosened sanctions against Venezuela’s oil industry. This year in April, the sanctions were reinstated.
dividends from Russia
The banking constraints imposed on Moscow by the US sanctions have also hindered OVL’s attempts to pay its portion of the abandonment fund for Russia’s Sakhalin-1 field. This has made it more difficult for the business to reclaim a 20% stake in the oilfield.
“The fund had to be paid in US dollars, according to the original directive. We’ve asked for that to be converted to Russian roubles,” Gupta declared. When the licensee or permittee of the well or facility does not comply, abandonment monies are utilised to operate or abandon the well or facility.
Russia has not been able to transfer the project’s shares to OVL due to nonpayment of the fund, according to Gupta. Dividends totalling more than $630 million are still trapped in Russia as a result.
OVL collaborates with its public and private Japanese partners, who together hold thirty percent of Sakhalin-1. Exxon, a multinational oil company based in the United States, holds a further 30% of Sakhalin-1. However, it declared last year that it is abandoning the project even though it recorded a loss that is reportedly in the billions.
Additionally, OVL is progressing with its gas project in Mozambique, where work has started on the ground. “We expect the force majeure to be officially lifted in the last quarter of the current financial year,” Gupta stated.
Ten percent of the participating stake in the Area 1 concession is held by BPRL Ventures Mozambique BV, an overseas subsidiary of Bharat Petro Resources Ltd, a wholly-owned subsidiary of BPCL. Four percent of the shareholding is held by Oil India, and sixteen percent is owned by OVL.