ONGC Secures OFAC License to Resume Venezuela Operations

State-owned Oil and Natural Gas Corporation (ONGC) has received a license from the US Treasury's Office of Foreign Assets Control (OFAC), allowing it to resume full operations in Venezuela. The approval removes a major hurdle for ONGC's Venezuelan investments, which could lead to increased production, new agreements, and potentially even taking over operatorship of some projects from Venezuela's state-owned oil company PDVSA.

ONGC Director-Finance Anupam Agarwal said the OFAC license gives the company greater freedom to work on its Venezuelan projects. The US sanctions on Venezuela's oil sector had complicated financial transactions, investments, and operations involving Venezuelan crude and energy assets.

The ONGC's overseas investment arm, ONGC Videsh Limited (OVL), has interests in two major Venezuelan oil projects: the San Cristobal project with a 40% stake and the Carabobo project with an 11% stake. The company expects positive developments in the near term, including new agreements and potentially greater operatorship responsibilities.

The OFAC license is significant from a financial perspective as well, allowing ONGC to manage the finances of its Venezuelan projects and potentially recover a pending dividend of more than $500 million.