ONGC Gets US OFAC Licence To Resume Full Venezuela Operations, Targets Higher Oil Production

State-run Oil and Natural Gas Corporation (ONGC) has received a licence from the US Treasury’s Office of Foreign Assets Control (OFAC), clearing the way for the company to resume full-scale operations in Venezuela after years of restrictions linked to US sanctions.

The approval is expected to give ONGC greater flexibility to invest in its Venezuelan assets, expand oil production and negotiate new arrangements with local authorities and partners.

The company may also take over operatorship of some projects currently managed by Venezuela’s state-owned oil company, PDVSA.

OFAC approval opens investment opportunities

ONGC Videsh Ltd (OVL), ONGC’s overseas investment arm, owns a 40% stake in the San Cristobal oil project, with PDVSA holding the remainder. OVL also has an 11% interest in the Carabobo project, which is currently under development.

According to ONGC Director-Finance Anupam Agarwal, the licence removes the sanctions-related risks that had previously forced the company to limit its activities in Venezuela. ONGC is now engaging with Venezuelan authorities and joint-venture partners regarding both projects.

The licence could also facilitate the recovery of more than $500 million in pending dividends from its Venezuelan investments.

ONGC plans to boost Venezuelan output

ONGC sees considerable potential to increase production from its Venezuelan assets. The San Cristobal project produced approximately 0.265 million tonnes of oil equivalent in FY26, which Agarwal said represents only around a tenth of its potential.

With the restrictions eased, the company can now consider fresh investment to raise output.

Venezuela is particularly important to ONGC because the country possesses the world’s largest proven crude oil reserves, estimated by OPEC at about 303 billion barrels.

Years of underinvestment, sanctions and operational challenges have constrained production, leaving substantial scope for development.

Agarwal said Venezuela’s new petroleum law also provides fiscal incentives that could encourage investment in the sector. ONGC is particularly interested in shallow, onshore fields where its experience in Western India could be useful.

The renewed expansion comes as India seeks to diversify overseas energy resources amid geopolitical uncertainty. ONGC believes greater operational involvement in Venezuelan fields could help unlock underdeveloped reserves while strengthening its international oil portfolio.