State-owned Oil and Natural Gas Corp’s overseas arm ONGC Videsh has sought a ‘specific license’ to operate in Venezuela from the US Department of Treasury, the company’s MD Rajarshi Gupta said. The proposal is in advance stages of consideration and the approval is expected soon, he said.
“We are in discussion with the government of Venezuela to take charge of operations of the two projects there in the new model, which we call the Chevron model, as Chevron has been doing. At the same time, we have been interacting with Office of Foreign Assets Control (OFAC),” the MD said. “They gave us some comfort that yes you can do some operations subject to pre-conditions. We have sought for a specific licence to operate in Venezuela,” he said.
ONGC has stakes in two oil fields in Venezuela including Sancristobal and Carabobo-1 with 49% 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 $500 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.
Gupta said that the company is ready to take operatorship of its projects in the country as soon as it receives the requisite approval.
“That’s in the final stages of consideration as to the best of our understanding.”
Presently, OVL produces 12,000-15,000 barrels per day from its projects in Venezuela which is expected to increase to 45,000-50,000 barrels per day of oil.
“After ONGC takes charge of operations, the output from the two fields can rise to 30,000 barrels per day in a year from 12-15,000 barrels per day,” Gupta said. “The output can rise to 45-50,000 barrels per day in a few years.”
Additionally, OVL is also awaiting a decision on its stake in the Sakhalin 1 field in Russia. The country has agreed to give a 20% stake to OVL subject to OVL paying $600 million in the abandonment fund for the field. The company has requested Russia to make the payment in rouble instead of in US dollars due to sanctions, the approval of which is expected shortly.
From: financialexpress
Financial News
