Easing of Venezuela sanctions may mean $410 million dividend income for ONGC

India’s top oil firm ONGC is hoping to recover about USD 413 million of unpaid dividend from an oilfield in Venezuela after sanctions on the Latin American nation were eased, an official aware of the development said on Thursday. The US Treasury Department partially lifted sanctions on Venezuela’s oil and gas sector last week. The partially lifted sanctions are through a new six-month license authorising transactions in the country’s oil and gas sector. The license is to be renewed only if Venezuela can meet commitments leading to fair voting in next year’s presidential election. The US government also amended two other licenses to remove the secondary trading ban on certain Venezuelan sovereign bonds and PDVSA debt and equity. However, a ban on trading in the primary Venezuelan bond market remains in place. ONGC Videsh Ltd, the overseas investment arm of state-owned Oil and Natural Gas Corporation (ONGC), holds a 40 per cent stake in the San Cristobal oilfield in eastern Venezuela’s Orinoco Heavy Oil belt. The project is operated jointly by OVL and Petrleos de Venezuela S.A. (PdVSA) - the national oil company of Venezuela. OVL and PdVSA had in November 2016 signed two definitive agreements for redevelopment of the project. The agreements provided a mechanism to liquidate the outstanding dividends of USD 537.63 million due to OVL. OVL agreed to provide loans of up to USD 60 million for implementing the remediation plan of the project. Under the loan arrangement, it provided a loan of USD 17.11 million and received part of the outstanding dividend amounting to USD 124.81 million as of March 31, 2023, the source said, adding that due to sanctions, these agreements had come to a standstill and balance dividend of USD 412.82 million was pending. The easing of sanctions will help get back the stuck dividends, he said. Also, the company is hoping to sell its share of oil from the field, which was 0.61 million tonnes in 2022-23, to whoever offers the best price, he added.