US hold on oil may help India recover $1 billion dues

NEW DELHI: A US-led takeover or restructuring of Venezuela's oil sector could deliver a benefit to India, potentially unlocking close to $1 billion in dues while accelerating the revival of crude production from fields it operates in the sanctions-hit Latin American country, analysts and industry sources said.

India was once a major processor of Venezuelan heavy crude, importing more than 400,000 barrels per day at peak levels, until sweeping US sanctions and rising compliance risks forcibly shut down purchases in 2020.

Its flagship overseas producer, ONGC Videsh (OVL), jointly operates the San Cristobal oilfield in eastern Venezuela, but output has been severely curtailed as US restrictions blocked access to critical technology, equipment, and services — leaving commercially viable reserves effectively stranded.




Venezuela has failed to pay OVL $536 million in dividends due on its 40% stake in the field up to 2014, and a near-equivalent amount for the subsequent period for which Caracas has refused to permit audits, effectively freezing settlement of the claims.

Sanctions could be eased after a US operation removed President Nicolas Maduro and placed the country's vast oil reserves under American oversight, analysts and energy executives said.

Once sanctions are eased, OVL can move rigs and other equipment from places, such as its parent ONGC's oil fields in Gujarat, to San Cristobal to revive output that has plummeted to 5,000-10,000 barrels per day, officials in the know of the matter said.