ONGC Secures US OFAC License To Continue Venezuela Operations

ONGC Videsh, the overseas investment arm of Oil and Natural Gas Corporation, will continue its operations in Venezuela after receiving a US regulatory waiver in July that permits the company to maintain its interests in the country's oil assets.

The OFAC clearance has eased uncertainty around ONGC Videsh's Venezuelan operations, although the company must first conclude a framework agreement with the Venezuelan government before finalising its future investment plans.

ONGC Chairman and Managing Director Arun Kumar Singh said work is currently underway to finalise the framework agreement with the Venezuela government. 

The agreement is expected to provide the basis for determining the company's future operational and investment plans in the country.

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“Once the agreement is signed, there will be visibility on capex,” the chairman said, indicating that ONGC's capital expenditure plans for its Venezuelan assets will be assessed after the framework is in place.

ONGC Videsh has longstanding interests in Venezuela's oil sector and has been seeking greater clarity over its operations amid regulatory and geopolitical uncertainties surrounding the country's energy industry.

The OFAC licence is significant for ONGC Videsh as it allows the company to continue its existing activities in Venezuela while the broader framework for its operations is worked out with the local government.

For now, the company's focus remains on concluding the agreement. 

Once signed, ONGC is expected to have better visibility on the scale and timing of investments required to sustain and potentially expand its presence in Venezuela.

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