A possible US-led restructuring of Venezuela’s oil sector could help India recover nearly $1 billion in long-pending dues and revive crude production from oilfields operated by Indian companies, according to analysts and industry sources.
India was once among the largest buyers of Venezuelan heavy crude, importing over 4,00,000 barrels per day at its peak. Imports stopped in 2020 after sweeping US sanctions made transactions difficult and forced Indian refiners to exit the market.
ONGC Videsh Ltd (OVL), India’s overseas oil arm, jointly operates the San Cristobal oilfield in eastern Venezuela. Output from the field has fallen sharply as sanctions restricted access to equipment, technology and oilfield services, leaving commercially viable reserves stranded, PTI reported.
Venezuela has also failed to clear dividend payments owed to OVL. According to industry sources cited by PTI, the country has not paid $536 million linked to OVL’s 40 per cent stake in San Cristobal up to 2014. A similar amount is due for subsequent years, but settlement has been frozen as Venezuela has not allowed audits for that period.
Analysts say sanctions could ease if the US assumes oversight of Venezuela’s oil sector. US President Donald Trump has said American oil companies would enter Venezuela to repair infrastructure and restart production.
Officials familiar with the matter told PTI that once restrictions are lifted, OVL could move drilling rigs and equipment from ONGC’s fields in Gujarat to San Cristobal. Production at the onshore field has dropped to 5,000–10,000 barrels per day, but could rise to 80,000–1,00,000 barrels per day with additional wells and modern equipment.
Resumption of crude exports would also allow OVL to recover close to $1 billion in unpaid dues from future revenues, analysts said. OVL had earlier sought a US sanctions waiver—similar to the one granted to Chevron—to continue operations.
Indian companies may also expand their footprint. OVL holds an 11 per cent stake in the Carabobo-1 heavy oil block, while Indian Oil Corporation and Oil India each own 3.5 per cent. Venezuela’s state-run PDVSA, the majority partner, may undergo restructuring under US oversight, analysts added.
India is expected to re-emerge as a key buyer if supplies resume. “If sanctions are eased, trade flows can restart quickly,” Kpler analyst Nikhil Dubey said, noting that Indian refineries are well suited to process Venezuelan heavy crude.
Before sanctions, Venezuela exported about 707 million barrels of crude annually, with India and China accounting for around 35 per cent. Exports have since fallen sharply. Analysts said a US-backed overhaul could lift production within a year, offering India an alternative to Middle Eastern oil supplies.
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