ONGC gets US licence to resume full operations in Venezuela after sanctions hurdle
New Delhi: State-owned Oil and Natural Gas Corp (ONGC) has secured a licence from the U.S. Treasury’s Office of Foreign Assets Control (OFAC), clearing the way for it to resume full operations in Venezuela, a senior company official said.
The approval ends years of limited activity by the Indian explorer due to sanctions-related risks in the Latin American nation.
Anupam Agarwal, director-finance at ONGC, said at an investor call following the company’s first quarter earnings that the U.S. licence removes a key hurdle for ONGC’s Venezuelan investments.”The U.S. approval could pave the way for the state-run explorer to expand production, sign new agreements and take over operatorship of some projects from Venezuela’s state oil company PDVSA,” Agarwal said.
ONGC has investments in Venezuelan oil assets through its overseas arm ONGC Videsh. Due to US sanctions on Venezuela in recent years, the company had scaled back operations and restricted activities to avoid compliance risks.
With the OFAC licence now in place, ONGC can potentially increase output from existing fields and pursue new deals with PDVSA. The development comes as global energy companies look to Venezuela, which holds the world’s largest proven oil reserves, to boost supply amid tight global markets.
Further details on specific projects and timelines for expansion are expected to be announced by ONGC and PDVSA in the coming months.
