 "Venezuelan government supporters hold photographs of Venezuela's late President Hugo Chavez and President Nicolas Maduro, after Donald Trump said the US has struck Venezuela and captured Maduro, in Caracas, on January 3. Reuters")
A US-led takeover or restructuring of Venezuela’s oil sector could bring significant financial and strategic gains for India, potentially helping the country recover nearly USD 1 billion in long-pending dues while boosting crude production from fields operated by Indian companies, The Times of India reported, citing analysts and industry sources.
India was once a major buyer of Venezuelan heavy crude, importing over 400,000 barrels per day at its peak. These supplies stopped in 2020 after sweeping US sanctions made purchases risky and logistically difficult, forcing Indian refiners to exit the market.
OVL operations affected by sanctions
ONGC Videsh Ltd (OVL), India’s flagship overseas oil producer, jointly operates the San Cristobal oilfield in eastern Venezuela. Output at the field has dropped sharply as US restrictions blocked access to essential equipment, technology, and oilfield services, leaving commercially viable reserves stranded.
Venezuela has also failed to clear dividend payments owed to OVL, including USD 536 million for its 40 per cent stake up to 2014, with a similar amount for subsequent years frozen as Caracas refused to permit audits.
Potential easing of sanctions after US intervention
Analysts and energy executives cited in report say that US sanctions could ease following the American military operation that removed President Nicolás Maduro and placed Venezuela’s oil resources under US oversight. US President Donald Trump has already said American oil companies would enter Venezuela to repair degraded infrastructure and restart production.
Once restrictions are lifted, OVL could move drilling rigs and equipment from its Gujarat operations to San Cristobal, potentially increasing output from the current 5,000–10,000 barrels per day to 80,000–100,000 barrels per day with additional wells and modern equipment. Resumed Venezuelan crude exports could also allow OVL to recover close to USD 1 billion in unpaid dues. OVL had previously sought a specific US sanctions waiver, similar to the one granted to Chevron, to operate and export oil.
Expansion opportunities for Indian companies
Indian firms could further expand their presence in Venezuela. OVL holds an 11 per cent stake in the Carabobo-1 heavy oil block, while Indian Oil Corporation and Oil India each own 3.5 per cent. Venezuela’s state-owned PDVSA, the majority partner in both projects, may undergo restructuring under US oversight, analysts said.
Strategic implications for India
India is expected to re-emerge as a key buyer if Venezuelan supplies return. “If sanctions are eased… trade flows can resume rapidly,” said Kpler analyst Nikhil Dubey, noting that Indian refineries are technically well-suited to process Venezuelan heavy crude.
Before sanctions, Venezuela exported 707 million barrels of crude annually, with India and China together accounting for 35 per cent. Exports have since halved. Analysts said a US-backed overhaul could restore production within a year, offering India a strategic alternative to Middle Eastern oil and strengthening its bargaining power in global energy markets.