ONGC to deepen cooperation with Venezuela despite US and EU sanctions

Oil and Natural Gas Corporation Videsh (ONGC-VL) is in talks with the sanctions-hit Venezuelan state oil company aimed at increasing crude oil production.

“Both companies are working on a proposal to design a joint scheme of integrated services associated with increased crude production, mainly in mature fields,” a statement from PDVSA (Petroleos de Venezuela, SA) said.

The Indian oil giant has also reaffirmed its commitment to continue developing joint projects in Venezuela, the statement added.

The meeting between ONGC officials and the Venezuelan side took place on November 10 in Caracas. It was attended by Operations Director ONGC-VL PK Rao and President of the PDVSA Nelson Martinez.

Efforts at deepening the bilateral cooperation between the two state-owned companies comes even as both the US and, more recently, the European Union, have imposed sanctions on Venezuela. While US President Donald Trump had imposed economic sanctions on Venezuela through an Executive Order dated August 24 this year, the foreign ministers of the European Union (EU) on Monday approved an arms embargo on the South American country.

Both the western powers, along with US-backed domestic opposition, accuse the current Venezuelan administration under socialist President Nicolas Maduro of manipulating the political institutions. The election to the Constituent Assembly in July this year, swept by Maduro’s allies, is seen as trigger to the US sanctions.

Venezuela, on the other hand, says that President Maduro enjoys widespread popularity in the country, evidenced from the Governor elections on October 15. Maduro’s United Socialist Party of Venezuela (PSUV) won governorships in 18 out of 23 states, in a vote that saw a 61 per cent turnout.

Venezuela’s Ambassador to India, Augusto Montiel, told National Herald that the US had been trying to foment trouble in Venezuela for almost fifteen years now. “The money that we have in reserves at institutions like the Deutsche Bank and Citibank is not being released, even as they accuse us of defaulting on our payments,” Montiel said.

The envoy said that Venezuela was in middle of an ongoing economic war, the root cause of which he said was political. “The US has been wanting a regime change in Venezuela, which they believe will help them control country’s oil and natural resources. We have the largest oil reserves in the world, more than even Saudi Arabia and Iran,” he said.

Montiel accused the Opposition in Venezuela of being in cahoots with the US. “The Opposition leaders have been travelling to other countries and asking the investors to not lend money to Venezuela. They have been undermining their own country’s interests,” he said.

Global ratings agency Standard and Poor (S&P) had on Monday said that the country had defaulted on its payment of $200 million to holders of Venezuelan bonds due in 2019 and 2024.

A debt restructuring deal with Russia, however, has helped the country to honour its international commitments for now. According to the Venezuelan government, the payment of interest on bonds resumed on Tuesday.

Reuters reported that the deal with Russia didn’t include paying the money owed by PDVSA, with which ONGC Videsh is mulling deeper cooperation. The overseas arm of the Indian oil major had been offered 9 per cent stake in San Cristobal field in the country in July this year, on top of 40 per cent it already owns, it was reported by Reuters.

As of September, PDVSA owed $449 million in dues to ONGC Videsh, which it said it would start clearing.