India continues its trading with Venezuela, its 4th largest oil supplier, despite ongoing turmoil

By: |
New Delhi | Updated: January 25, 2019 5:55:42 PM

India has continued trading with Venezuela despite the threat of fallout from US sanctions.

india venezuela trade, oil supplier, india, ravessh kumar, Venezuelan crude, ONGC, IOCLThe total crude oil imports from Venezuela in 2017-18 are $ 5.8 bn; crude import from that country between April-Oct 2018 is $ 4.6 bn.

Amidst the political crisis in South American nation Venezuela, India has said that it is closely following the emerging situation there. Responding to media queries, the official spokesperson of Ministry of External Affairs Raveesh Kumar said, “We are of the view that it is for the people of Venezuela to find political solution to resolve their differences through constructive dialogue and discussion without resorting to violence.”

He added, “We believe in democracy, peace and security in Venezuela are of paramount importance for the progress and prosperity of that country.” India has continued trading with Venezuela despite the threat of fallout from US sanctions.

Also read| Piyush Goyal warns taxmen: Don’t be overzealous; also, has an advice for businesses

Diplomatic sources told FE that India continues to be one of the largest buyers of Venezuelan crude. Over, 400,000 bpd continues to be procured by Indian companies.

Despite pressure, India has continued its engagement with Venezuela and is India’s 4th largest oil supplier. The total crude oil imports from Venezuela in 2017-18 are $ 5.8 bn; crude import from that country between April-Oct 2018 is $ 4.6 bn.

Also, New Delhi has recently approved a new Venezuela envoy to India Ms Coromoto Godoy, a career diplomat, and an expert in the energy sector will be coming to take up her post soon.

Confirming these top diplomatic sources said that, “With the arrival of the new envoy shortly, India-Venezuela relations will get a great push.”

Diplomatic sources told FE that India continues to be one of the largest buyers of Venezuelan crude. Over 400,000 bpd continues to be procured by Indian companies.

Both New Delhi and Caracas have been working on continuing their joint investments in the energy sector. Venezuela’s PDVSA and ONGC have agreed to further invest in the San Cristobal joint venture (JV) over the next few years to increase production.

As reported by The FE earlier, the two companies had signed a contract to increase production in the Orinoco Oil Belt worth $318 million and in 2017 the first high-pressure water pump, part of a multimillion-dollar deal, was inaugurated.

In view of the large and growing refining capacity in India, firms such as IOCL (for their refinery in Paradip) are ready to procure crude from Venezuela. This would be a possibility in future when production of Venezuelan crude increases.

“The oil JV in Venezuela with participation of Indian firms (OVL, IOCL and Oil India) is expected to do better as infrastructure in the area develops and the economic situation in Venezuela improves,” a source had shared.

Venezuela, on its part, also plans to significantly increase crude oil supply to India and is negotiating with Reliance Industries, its major customer, for a joint venture in the OPEC country’s energy industry.

As has been reported earlier, during her annual press conference in May last year, responding to question external affairs Minister Sushma Swaraj had said that the US sanctions on Iran and Venezuela will not damage India.

The question was asked in view of Washington tightening sanctions against Venezuela over the controversial re-election of President Nicolas Maduro. Both Iran and Venezuela are key oil suppliers to India and the US has been warning companies and nations doing businesses with them.

Swaraj had made it very clear that New Delhi did not make foreign policy under pressure from other countries and had stated that India would continue trading with Venezuela, and that there was no plan to use its local crypto currency in oil trade as it was banned by the Reserve Bank of India.

Presently, there is political upheaval in that country as the opposition leader Juan Guaidó, has been attempting to replace President Nicolás Maduro with a transitional government. Guaido claim to legitimacy has been backed by a number of countries, including the United States. According to reports Russia has warned the US against meddling in that country.

Reports from Caracas indicate that Venezuela’s armed forces have declared their support and loyalty to President Maduro, which was a setback to the opposition there.

Transcript of telephonic discussion between Russian President Vladmir Putin and Maduro posted on https://en.kremlin.ru states, “The President of Russia expressed support for the legitimate Venezuelan authorities amid the worsening of the internal political crisis provoked from outside the country. He emphasised that destructive external interference is a gross violation of the fundamental norms of international law. He spoke in favour of searching for solutions within the constitutional framework and overcoming differences in Venezuelan society through peaceful dialogue.

The President of Venezuela provided his assessment of the dangerous turn of events in his country in recent days and expressed gratitude for the principled stance taken by the Russian Federation.”

Both leaders reaffirmed their shared desire to continue Russian-Venezuelan cooperation various sectors.

Long time allies of Venezuela countries like Cuba, Bolivia and Mexico are not supporting the opposition leader Guaidó as the country’s leader, other countries including Argentina, Brazil, Chile, Colombia, Costa Rica, Paraguay, Peru, Ecuador, Guatemala, have expressed their support.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

FinancialExpress_1x1_Imp_Desktop