While no decision has been taken on the nature of the alliance, whether strategic or equity-based, sources say that it will eventually pave the way for strengthening cooperation between the two countries in the oil sector. Venezuela is reportedly keen on becoming a long-term supplier of crude to India and Petroles may even consider participating in crude exploration here.

ONGC Videsh has operations in Vietnam, Russia, parts of Africa, the CIS with plans on the anvil for Iran and Iraq. Companies like Reliance Petroleum, Gas Authority of India and Indian Oil Corporation (IOC) are keen to team up with ONGC Videsh in these efforts and this could also apply to the foray in Venezuela.

It remains to be seen what fields will be made available as a host of big names in the global oil business have already established a strong base in the country. The Venezuelan government is, however, keen on giving a thrust to building bonds between developing nations. Brazil has been another active South American participant and its national oil company, Petrobras, has been eyeing some of the blocks awarded by the Indian government under the New Exploration Licensing Policy (NELP).

Oil companies here have realised that there are a host of opportunities overseas. Mauritius, for instance, is now the recent favourite, with IOC earmarking a $12 million dollar investment in the country. Hindustan Petroleum Corporation (HPCL), likewise, is exploring opportunities in the Mauritian retail trade market.

Years ago, Bharat Petroleum Corporation was a hot contender for acquiring Colombo Gas in Sri Lanka but missed out because of bureaucratic delays. Recently, Reliance Petroleum signed a contract with the National Iranian Oil Company and Petronas of Malaysia to work on producing liquefied natural gas in Iran.

IOC has been among the most active in international markets and its Servo brand of lubricants have made an entry in Nepal, Malaysia, Bangladesh and other countries in the Asian region. The Fortune 500 company, which is now keen on building some expertise in exploration and production, is looking at fields abroad, especially the CIS countries where there is abundant oil. Interestingly, in Malaysia, IOC has launched Servo through a franchising route with a local/ player, Regal One Sdn Bhd (ROSB). The company, which caters to filling brake fluid for multionationals like Shell, will act as the local blender-cum-distributor for Servo.

Though ROSB will market Servo lubes blended by them in Malaysia only, IOC is exploring the possibility of exporting the product to Bangladesh as well as Sri Lanka in view of the cost-effectiveness of base oils and additives procured from Singapore.

IOC has opted for the franchising route in Malaysia as there are some stumbling blocks relating to the ownership of inputs for blending lubricants. These comprise base oils and additives which would require the establishment of a wholly-owned subsidiary by IOC.