ONGC might get nearly $500 million in unpaid dividends from its Venezuelan oil project, as per Jefferies. The evolving US-Venezuela situation has raised hopes of long-pending payouts from Venezuela. Market experts predict that a potential US control of Venezuela’s oil industry could lead to lifting sanctions on Venezuelan crude exports.
ONGC stands to benefit if the situation improves, expecting around $500 million in unpaid dividends from the San Cristobal project. The company’s exposure to Venezuela’s oil sector is through its overseas arm, ONGC Videsh Limited (OVL). ONGC holds a 40% interest in the San Cristobal Project and an 11% stake in the Carabobo-1 oil field along with Indian Oil Corporation and Oil India.
Jefferies warns of a medium-term risk for ONGC in a potential resurgence of Venezuelan oil output. Higher production from Venezuela could increase global supply, impacting crude oil prices and upstream oil companies. The US-Venezuela conflict has added a geopolitical risk premium to oil prices, although its immediate impact on global supply is limited.
Commodity experts highlight that Venezuela currently produces 800,000 to 1.1 million barrels of oil daily, representing about 1% of global supply. The change in control over Venezuela’s vast oil reserves could have significant implications for heavy crude pricing and long-term supply forecasts.
