Amid shifting geopolitical equations following the recent US intervention in Venezuela, India has stepped up efforts to unlock nearly $580 million in stalled dividends of ONGC Videsh Ltd, underscoring the growing interplay between sanctions policy and India’s overseas energy investments, according to people familiar with the matter.
Along these lines, India is carrying out diplomatic engagement with Washington and Caracas.
The unpaid dividends relate to ONGC Videsh Ltd’s (OVL) stake in Venezuela’s San Cristobal oilfield, where the overseas arm of state-run Oil and Natural Gas Corp holds a 40% participating interest, with the remaining stake owned by Venezuelan national oil company Petróleos de Venezuela, S.A. (PdVSA).
The dividends have remained blocked for several years following US sanctions on Venezuela’s oil sector, which disrupted production and restricted cross-border financial transactions.
“Ministerial level talks are underway. involving all the stakeholders. There is no final outcome yet, but talks have gained momentum in recent weeks,” said an official aware of the developments, requesting anonymity. “We are on the brighter side, given the changing circumstances,” the official added.
Energy Week Dialogue
According to people in the know, officials from PdVSA are expected to arrive in India on Wednesday and are likely to hold meetings with Indian counterparts during the ongoing India Energy Week (IEW). The issue of unpaid dividends is expected to feature prominently in these discussions.
OVL has been present in Venezuela since 2008, viewing the country’s vast hydrocarbon reserves as a long-term strategic asset to support India’s energy security. However, successive rounds of US sanctions since 2020 have significantly curtailed output at San Cristobal and blocked the repatriation of earnings.
India’s state-run firms had invested about $2.5 billion in Venezuela prior to the sanctions.
Apart from San Cristobal, OVL has also partnered with Indian Oil Corporation (IOC) and Oil India Ltd (OIL) to invest $2.2 billion in the Carabobo-1 heavy oil project. Production at Carabobo-1 has also been adversely impacted due to sanctions, under-investment, and infrastructure constraints.
New Delhi had earlier explored options such as seeking sanctions waivers from the US and proposing oil shipments in lieu of cash payments to recover dues. These efforts, however, did not yield results. The diplomatic context has shifted following recent developments in Venezuela.
Recent Political Upheaval
Earlier this month, US forces carried out a high-profile operation in Caracas, detaining President Nicolás Maduro and transferring him to the US.
Subsequently, US President Donald Trump signed an executive order declaring a national emergency to safeguard Venezuelan oil revenues held in US Treasury-linked accounts, stating that these funds would be preserved to advance US foreign policy objectives.
Earlier this month, global brokerage firm Jefferies has said, flagging a potential balance sheet and sentiment boost for the state-run explorer if a US-led restructuring of the Latin American nation’s oil sector goes through.
In a note, Jefferies highlights that “ONGC has not been paid its share of dividends from production at San Cristobal, totalling more than US$500mn.”
The brokerage adds that “with the US stepping in, Oil And Natural Gas Corporation may stand to recover these unpaid amounts,” hinging the upside on a prospective US takeover of Venezuela’s oil industry and an associated easing of sanctions.
In FY25, India’s imports from Venezuela stood at $364.5 million, with Crude oil accounting for $255.3 million, an 81.3% decline from FY24.