ONGC Videsh (OVL), the overseas arm Oil and Natural Gas Corporation (ONGC), is in further discussions with the Venezuelan government to take crude cargoes in order to liquidate its pending dividends, chairman and MD Rajarshi Gupta said. The company is also seeking to get the operatorship of its two ongoing projects in Venezuela and invest more in order to increase production, he added.
“Currently, we have a joint operatorship (with PdVSA). Going ahead, we will have more say,” Gupta said. With the US sanctions on Venezuela easing, these negotiations come as part of the company’s strategy to boost its overseas production and gain control of Venezuelan assets.
“We have taken crude in lieu of dividend some time back and this lifting of sanctions is a very positive sign,” Gupta told reporters on the sidelines of the India Energy Week. “We are in advanced discussions with the government of Venezuela to get further cargoes to liquidate our dividends and at the same time to get operatorship of the two projects that we have there and increase our production.”
Venezuela has the largest proven oil reserves in the world and OVL aims to increase its investments in its overseas projects that will aid to its overall output. However, the company is still charting out the size of investment required for the same.
“The investment will not be much in dollar terms, but we will have to invest. Venezuela has the largest reserves in the world. If we invest more, we will get more production,” Gupta said.The company has also taken crude in lieu of dividends earlier. In January, petroleum secretary Pankaj Jain had said that Venezuela has agreed to give crude oil to OVL to help it recoup its pending $600-million dividend.
OVL holds a 40% stake in the San Cristobal field in eastern Venezuela with Venezuelan company PdVSA holding the remainder. The other project includes the Carabobo exploratory project.Speaking about the company’s recent incorporation of a wholly owned subsidiary in Gujarat’s GIFT city and whether it would hold Russian assets in the treasury, Gupta said that the company will look for possible ways to do so going ahead.
“Russian assets are held through our different subsidiaries, any change of shareholding requires regulatory nod. But yes, GIFT city is our focus subsidiary, going forward we will have it (Russian assets) there. Also, existing shareholding if we can transfer, if possible and if there are no taxation leakages, we will look into it,” Gupta said. OVL’s subsidiary, Overseas IFSC, in Gujarat’s GIFT City will function as a treasury hub catering to OVL and its 25 subsidiaries across 15 countries.
Highlighting the company’s investment plans going ahead, the CMD said OVL will be spending Rs 8,000 crore in its exploration and production projects, and with ONGC’s annual investment of Rs 35,000 crore, the combined investment is set to exceed Rs 40,000 crore.
Gupta further said that the company is optimistic of its production growth and projected the company’s output reaching 15-16 million tonne in four years, with improved contributions from Mozambique and Brazil.
Moreover, the company is looking forward to starting the construction of its LNG trains in Mozambique by March 2024 owing to improved supply situation and discussions to lift the force majeure to commence construction.