India in talks with US, Venezuela over ONGC Videsh’s $600 million stuck dividends

OVL, the overseas arm of Oil and Natural Gas Corporation (ONGC), has held a 40% stake in the San Cristobal Project in Venezuela since 2008, with the country’s state-owned oil company Petróleos de Venezuela SA (PDVSA) owning the remaining 60%. A PDVSA team is currently in India to discuss the long-pending issue.

The outcome of these talks will determine whether India can recover $600 million of stranded overseas earnings, revive access to one of the world’s largest oil reserves, and potentially lower its crude import bill.

“G2G talks are underway between the three countries. So far, no conclusion has been reached, but it is expected that things will move fast," said one of the two people cited above, requesting anonymity.

The dividends have been due since the tenure of late President Hugo Chávez, when earnings from PDVSA were appropriated to fund social spending. Subsequent US sanctions sharply curtailed production at San Cristobal and blocked the repatriation of dividends. New Delhi’s earlier efforts to secure a sanctions waiver or receive oil instead of dollar payments have not yielded results.

Separately, OVL has partnered with Indian Oil Corp. Ltd and Oil India Ltd in the Carabobo-1 project, where output has also been affected by US sanctions. Mint had earlier reported that a possible easing of sanctions following US intervention could, over time, restore India’s access to Venezuela’s vast oil reserves. Indian state-run firms had invested around $2.5 billion in Venezuela before sanctions were imposed in 2020.

“PDVSA’ representatives will likely discuss this issue of stuck dividends during the ongoing India Energy Week with their counterparts," said the second person cited above, who also did not want to be named.

In a post-midnight operation on 3 January, the US bombed multiple facilities in Caracas, captured President Nicolás Maduro and his wife Cilia Flores, and flew them to the US. US President Donald Trump later signed an executive order declaring a national emergency to safeguard Venezuelan oil revenues held in US Treasury accounts from attachment or judicial process, ensuring the funds are preserved to advance US foreign policy objectives.

Expert caution

Strategic experts, however, remain skeptical about a swift resolution.

“Given some of the recent commentary of US top officials and the US president, I don't see very fair treatment with India with regard to Venezuela," said C. Uday Bhaskar, director, Society for Policy Studies.

Queries emailed to the ministries of external affairs and petroleum and natural gas, OVL, PDVSA, and the embassies of the US and Venezuela in New Delhi remained unanswered till press time.

Oil math

While concerns persist over the productivity of Venezuela’s oil wells, any potential easing of sanctions and reopening of the country’s crude sector has raised hopes of additional supply entering global markets. However, Venezuelan crude is highly viscous, making it difficult to refine and potentially forcing sellers to offer lower prices to large buyers such as India.

This is significant for India, the world’s third-largest oil consumer, which imports 88–90% of its crude, accounting for about a quarter of the import bill. A $1 per barrel fall in crude prices can lower India’s import bill by ₹13,000 crore.

“While traders may be offering barrels to Indian refiners, the market response remains hesitant due to quality complexity and the commercial challenge of making Venezuelan crude work at current price levels," said Sumit Ritolia, lead research analyst, refining and modelling at ship-tracking firm Kpler.

India’s already small trade with Venezuela continues to shrink. In FY25, India’s total imports from Venezuela stood at $364.5 million, with crude oil accounting for $255.3 million, an 81.3% drop from $1.4 billion in crude imports in FY24. Exports to Venezuela were limited to $95.3 million, led mainly by pharmaceutical shipments worth $41.4 million.

The author is in Panaji on the invitation of the Union ministry of petroleum and natural gas.