In a significant development for India’s overseas energy portfolio, state-owned Oil and Natural Gas Corporation (ONGC) has secured a licence from the US Treasury’s Office of Foreign Assets Control (OFAC). This approval allows the company to resume full operations in Venezuela after years of restricted activity driven by US sanctions-related risks.
The announcement came from Anupam Agarwal, Director (Finance) at ONGC, during a post-first-quarter earnings investor call. “Now we have full freedom to work on the Venezuela project because earlier we were restricting our operations there because of the sanction-related risks. Those risks are behind us,” Agarwal stated.
Background
ONGC Videsh Ltd (OVL), the company’s overseas investment arm, holds a 40% participating interest in the San Cristóbal oil project (with the remainder held by Venezuela’s state oil company, Petróleos de Venezuela S.A. or PDVSA). It also holds an 11% stake in the Carabobo project (also referred to as Carabobo-1 in some reports), which remains under development.
For years, US sanctions on Venezuela’s oil sector have limited ONGC’s ability to fully invest, manage finances, or expand production at these assets. This included challenges in handling transactions involving US banking channels, services, or dollars without specific authorisations. The company had previously sought approvals under frameworks similar to the “Chevron model,” which grants licensed foreign operators greater control over finances, operations, production, and marketing.
The OFAC licence removes these key hurdles. It enables ONGC to manage project finances more effectively and positions the company to recover pending dividends exceeding USD 500 million (with some reports citing a range of USD 500–600 million) that had been stranded due to sanctions restrictions.
Operatorship, Production Growth, and New Agreements
ONGC is already in discussions with Venezuelan authorities and its joint-venture partners regarding its interests in San Cristóbal and Carabobo. The company expects positive developments soon, including new agreements and a possible transfer of operatorship from PDVSA on some projects.
San Cristóbal produced around 0.265 million tonnes of oil equivalent in FY26, roughly one-tenth of its estimated production potential. Current output from ONGC’s Venezuelan assets is reported in the range of approximately 12,000–15,000 barrels per day. With the licence in place, the company plans to invest in raising output, with targets cited in reports of scaling to around 30,000 barrels per day (and higher potential in some earlier projections once full control is restored).
Venezuela’s recently enacted petroleum law provides additional fiscal incentives for resource development. This improves the investment environment for foreign oil companies and their local partners. The shallow, onshore nature of these fields aligns well with ONGC’s operational expertise from domestic assets in western India, including areas around Mehsana and Ahmedabad.
Strategic Importance
Venezuela holds the world’s largest proven crude oil reserves, estimated by OPEC at about 303 billion barrels, surpassing even Saudi Arabia. For ONGC, this makes the country a high-potential destination despite past underinvestment, sanctions, and operational challenges that left substantial upside untapped.
The broader context includes evolving US policy on sanctions on Venezuela. In early 2026, OFAC issued a series of general licences expanding authorised activities in the Venezuelan oil and gas sector (including upstream services under GL 48 and specific authorisations for certain international majors). ONGC’s specific licence fits within this shifting landscape, allowing greater operational freedom while remaining subject to US oversight frameworks.
Implications for India
This development strengthens ONGC’s overseas production base and supports India’s energy security goals by unlocking previously constrained assets. Successful recovery of pending dividends and production ramp-up would improve returns from OVL’s portfolio. It also demonstrates how Indian public-sector energy companies can navigate complex geopolitical and sanctions environments to protect and grow long-term investments.
While execution risks remain, such as finalising operatorship transfers, on-ground operational improvements, and navigating any residual regulatory conditions, the OFAC licence marks a clear turning point. ONGC now has the regulatory space to invest, expand, and potentially take a more active operating role in one of the world’s most resource-rich but underdeveloped oil provinces.
As talks with Venezuelan counterparts progress, the coming months will reveal how quickly these opportunities translate into higher output and recovered value for India’s flagship energy company.