MC EXCLUSIVE India holding discussions with US, Venezuela over $600 million OVL’s stuck dividends

(Representative image)

• India discusses ONGC Videsh's $600M stuck dividends with US and Venezuela.
• US sanctions halted ONGC's income from Venezuelan oil fields for several years
• US sanctions easing in 2023 slightly revived India's oil imports.

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India is holding government level discussions with Venezuela and the US over the stuck dividends of state-run ONGC Videsh Ltd in Venezuela post the US ouster of Venezuelan president Nicolas Maduro, officials sources told Moneycontrol.

ONGC has stakes in two oil fields in Venezuela including Sancristobal and Carabobo-1 with 40% and 11% stake, respectively. However, due to the imposition of US sanctions, the company has not been able to receive the income for the past few years and has around $600 million of dividends stuck in the country. Both the projects are operated by Petróleos de Venezuela, S.A., (PdVSA), which had earlier agreed to give oil to OVL instead of cash dividends.

“Talks in the ministerial level are underway for the stuck dividend payments from Venezuela and we hope things will move fast now,” one of the sources aware of the development told Moneycontrol.

These assets have remained underutilised for years due to sanctions, underinvestment, and payment constraints, with dividends and receivables effectively stranded.

Back in 2024, ONGC Videsh has sought a ‘specific license’ to operate in Venezuela from the US Department of Treasury.

FY21 onwards, Venezuela’s position in India’s crude oil imports weakened sharply. Its share fell to 1.1% in FY21, and imports dropped to nil during FY22 and FY23, reflecting the impact of US sanctions on Venezuela’s oil sector, according to Rubix.

These sanctions significantly increased compliance risks and transaction costs, leading Indian refiners to largely halt imports from Venezuela despite refinery compatibility. A temporary revival was seen in FY24, when Venezuela’s share recovered marginally to 0.6% ($802 million), following a partial easing of US sanctions in late 2023.

Venezuela was at one time an important supplier of crude oil to India, accounting for a meaningful share of 6.7% of India’s oil import basket in FY18. Between FY18 and FY20, Venezuela consistently ranked among India’s top six crude oil suppliers, with its share ranging from 5.9% to 6.7%, according to data from Rubix Data Sciences. In value terms, crude oil imports from Venezuela peaked at $7.2 billion in FY19, underlining its significance in India’s energy sourcing strategy during this period.

“A stabilised operating environment under US oversight could enable field redevelopment, restore cash flow visibility, and allow recovery of outstanding dues. While transitional risks around contract terms and governance remain, Venezuela’s need for capital, technical expertise, and long-term buyers suggests that Indian upstream participation is likely to be retained rather than diluted,” Kpler had said.

The recent US intervention in Venezuela has sparked discussions about a potential stabilisation of the Venezuelan oil sector, which holds the largest reserves, a move that could benefit India in the medium- to long-term, analysts say.

The move could allow limited volumes of Venezuela’s heavy crude to re-enter India’s import mix, primarily benefiting complex refineries.