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ONGC gets US nod for Venezuela operations

State-run Oil and Natural Gas Corporation (ONGC) has received a licence from the US Treasury Department’s Office of Foreign Assets Control (OFAC) that allows its overseas arm, ONGC Videsh Ltd (OVL), to resume full operations in Venezuela.

The approval removes a major sanctions-related hurdle that had restricted ONGC’s activities in the South American country for years. The company can now look at increasing oil production, making fresh investments, negotiating new agreements and potentially taking over the operatorship of some projects currently managed by Venezuela’s state-run oil company PDVSA.

The development is important for ONGC’s overseas strategy as the company looks to increase production from its international assets and diversify its sources of crude oil. The OFAC licence also creates a path for the company to recover hundreds of millions of dollars in dividends that have remained stuck because of restrictions on financial transactions involving Venezuela.

ONGC Finance Director Anupam Agarwal said the US approval gives the company greater freedom to operate its Venezuelan projects. Earlier, ONGC had deliberately limited activities because of the risks associated with US sanctions. With the licence now in place, the company can examine ways to increase production and improve returns from its investments.

ONGC Videsh has interests in two major Venezuelan oil projects. It holds a 40% stake in the San Cristobal project and an 11% interest in the Carabobo project. The assets are located in the oil-rich Orinoco region and form an important part of ONGC’s overseas portfolio.

Production from these projects is currently estimated at around 12,000 to 15,000 barrels per day. ONGC is targeting an increase to about 30,000 barrels per day within a year, although achieving that goal will depend on operational decisions, investment and discussions with Venezuelan authorities and partners.

One of the biggest opportunities is the possibility of gaining operatorship. At present, Venezuela’s state oil company PDVSA plays a key role in operating the projects. ONGC wants to explore whether greater operational control can help improve production and efficiency.

Taking operatorship would give ONGC greater control over field development, production planning and investment decisions. However, the move would require negotiations with Venezuelan authorities and other stakeholders, meaning the licence does not automatically transfer operational control to the Indian company.

The other major issue is money owed to ONGC. Its Venezuelan investments have generated dividends that could not be repatriated because of sanctions and restrictions on financial transactions. The outstanding amount is estimated at around $600 million, while other reports put the figure at more than $500 million.

Data cited by Sahi showed that the outstanding dividend receivable of an ONGC Videsh subsidiary from Venezuelan associate PIVSA stood at ₹4,818.47 crore as of December 31, 2025, up from ₹4,758.44 crore three months earlier. The new US licence could allow ONGC to begin discussions aimed at recovering these funds.

For ONGC, recovering the money would provide a significant financial boost. However, the process may not be immediate. The company will need to work with its Venezuelan partners and navigate local procedures before the pending dividends can be converted into cash and transferred out of the country.

The US decision also reflects a broader change in the operating environment for Venezuela’s oil industry. US sanctions have historically restricted international companies from freely conducting business with Venezuelan entities. Recent policy changes have gradually opened the door for selected international energy companies to return or expand their presence in the country.

That shift is creating opportunities for international oil companies while also increasing competition for Venezuela’s energy assets. ONGC will therefore need to balance the potential returns from its Venezuelan investments against geopolitical and operational risks.

The company’s latest move comes as it works to strengthen production across its domestic and international portfolio. ONGC has been investing heavily in exploration and production while also seeking partnerships to improve output from mature fields.

Its overseas arm, OVL, remains an important part of this strategy. The company has interests in projects across several countries, including Russia, Mozambique and Venezuela. ONGC has previously indicated that international assets can provide additional production and help diversify its energy portfolio.

The Venezuela opportunity is particularly significant because of the country’s vast crude reserves. Increased production from ONGC’s existing assets could strengthen its international oil output at a time when India remains heavily dependent on imports to meet domestic energy requirements.

For India, the development could also support the broader objective of energy security. Having stakes in overseas oilfields gives Indian companies access to additional sources of crude and reduces dependence on any single geographical region.

At the same time, Venezuela remains a challenging market. Political developments, regulatory changes, infrastructure constraints and the condition of oilfields could affect ONGC’s plans. The company will also need to invest in production and infrastructure if it wants to achieve its target of doubling output.

Investors are likely to closely track three developments: the recovery of the pending dividends, progress towards operatorship and the pace at which oil production increases. A successful execution of these plans could improve the financial contribution from ONGC Videsh’s Venezuelan assets.

The OFAC licence therefore marks more than a regulatory clearance for ONGC. It gives the Indian oil major an opportunity to revive assets that had remained constrained by sanctions, recover money that had been locked up and seek greater control over production.

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Centre clears ₹84,0840 cr Samudra Manthan scheme

The Union Cabinet has approved the ₹84,084-crore Samudra Manthan National Offshore Exploration Scheme, giving India’s search for oil and natural gas beneath its waters a major financial push. The scheme will run through financial year 2030-31 and is aimed at increasing domestic hydrocarbon production, attracting global energy companies and reducing the country’s dependence on imported crude oil and gas.

The programme comes at a time when energy security has become a bigger priority for India. The country imports a large share of the crude oil it consumes, leaving its economy exposed to international oil prices, geopolitical tensions and disruptions in global energy supplies. By expanding exploration within Indian waters, the government hopes to create a stronger domestic source of oil and gas over the coming years.

Samudra Manthan will focus heavily on deepwater and ultra-deepwater exploration, areas that are technically difficult and expensive to explore. The government plans to share part of the financial risk involved in drilling exploratory wells, making such projects more attractive to companies with the technology and expertise needed for offshore operations.

A key component of the scheme is financial assistance for deepwater drilling. The government plans to support eligible exploratory wells by covering up to 50% of their drilling costs, subject to specified limits. A deepwater well can require an investment running into hundreds of crores of rupees, depending on its location and geological complexity. Sharing some of that risk is expected to encourage companies to take up projects that may otherwise be considered commercially challenging.

The government is also putting significant money into seismic surveys, which are essential for identifying possible oil and gas deposits beneath the seabed. Better seismic data can give exploration companies a clearer picture of underground geological structures before they commit to expensive drilling campaigns.

The scheme covers the wider offshore exploration ecosystem rather than focusing only on drilling. It includes efforts to improve geological data, develop common offshore infrastructure and strengthen domestic capabilities in equipment and services required for oil and gas exploration. The broader objective is to make offshore exploration faster, more efficient and commercially viable.

India has already started moving in this direction. Nearly one million square kilometres of offshore areas that were earlier classified as restricted or “No-Go” zones have been opened for exploration. This has significantly expanded the acreage available to energy companies and created new opportunities in several offshore sedimentary basins.

The Krishna-Godavari, Mahanadi and Cauvery basins, along with the Andaman region, are among the areas expected to benefit from the renewed exploration push. These regions are considered to have significant hydrocarbon potential, although discovering commercially viable reserves will depend on the results of seismic surveys and drilling.

The government’s strategy is also beginning to move from planning to actual exploration. Oil and Natural Gas Corporation (ONGC) has already begun drilling its first deepwater exploratory well in the Mahanadi offshore basin under the Samudra Manthan programme. The start of drilling represents an important step as India attempts to tap resources located in more challenging offshore environments.

The government is also seeking greater participation from international energy companies. Deepwater exploration requires specialised drilling equipment, advanced geological technologies and significant technical expertise. Bringing experienced global players into Indian offshore projects could help accelerate exploration while giving domestic companies access to new technology and capabilities.

The initiative could also create opportunities for India’s oilfield services and manufacturing sectors. As offshore activity expands, demand is expected to increase for drilling equipment, subsea technology, engineering services, vessels and other specialised infrastructure. This could support the government’s broader Make in India and Atmanirbhar Bharat objectives in the energy sector.

The timing of the scheme is particularly important because India’s energy demand is expected to continue rising. Economic growth, industrial activity, transport and urbanisation are all likely to keep fuel consumption elevated. Greater domestic production could therefore help reduce the pressure created by rising imports.

However, the government’s ambitious targets will depend on actual exploration success. Offshore drilling is expensive, technically complex and carries considerable geological risk. Even when oil or gas is discovered, it can take years before a field is fully developed and begins commercial production.

The government is nevertheless betting that reducing exploration risks will encourage more companies to invest. The ₹84,084-crore allocation is intended to create the conditions needed for a sustained offshore exploration campaign rather than a short-term drilling programme.

Samudra Manthan therefore represents a major shift in India’s offshore oil and gas strategy. With government funding, expanded exploration acreage, new seismic data and a push for deepwater drilling, the Centre is looking to turn India’s offshore waters into a larger source of domestic energy.

 

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Corporate

ONGC shares decline 4% as Q4 growth disappoints

Shares of ONGC declined by nearly 4% on May 27 after investors reacted to the company’s fourth-quarter earnings, which showed only modest growth in net profit and raised concerns over the pace of future performance.

The stock came under selling pressure in early trade following the release of the company’s March quarter results. Investors appeared cautious despite the company reporting growth in profit, as the increase was seen as lower than some market expectations.

According to the quarterly results, ONGC posted a moderate rise in net profit during the fourth quarter, supported by operational performance and production-related factors. However, pressure from crude oil price movements and market uncertainties continued to influence investor sentiment.

Market participants said investors were closely examining the company’s earnings quality and future outlook rather than focusing only on headline profit numbers. Weakness in energy stocks and broader market volatility also added pressure on the stock.

Despite the fall in the share price, some analysts maintained that the company’s long-term fundamentals remain supported by its position in the energy sector and ongoing production activities. However, near-term movement may continue to depend on crude oil trends and broader market sentiment.

The decline in ONGC shares also came during a mixed session for the broader market, where energy counters witnessed pressure while selective sectors attracted buying interest.

Investors are expected to closely monitor future guidance, operational performance and movement in global energy prices for further direction on the stock. Market experts said that while long-term prospects remain under observation, short-term sentiment is likely to stay sensitive to earnings performance and commodity market developments.

Also Read: Government launches ₹5,000 cr Coal India OFS

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India eases royalty rules for oil and gas firms

Shares of ONGC and Oil India surged up to 9% after the Indian government reduced royalty rates on crude oil and natural gas production to encourage higher domestic output.

The policy aims to support upstream oil and gas companies by lowering their operational costs and improving profitability. Officials said the revised structure is designed to boost exploration, attract investment, and increase India’s energy production.

Under the new framework, royalty rates have been rationalised across onshore, offshore, and deepwater fields. Offshore and gas production rates have been reduced, while some categories now offer lower or phased royalty charges.

Market analysts say the move could significantly benefit state-run producers like ONGC and Oil India, improving cash flows and encouraging fresh investment in difficult exploration areas.

Following the announcement, both companies saw strong buying interest on the stock market, reflecting investor optimism about higher earnings potential.

The government’s decision is part of a broader push to reduce India’s dependence on imported crude oil and strengthen domestic energy security through increased local production.

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India urged to cut West Asia energy dependence

India should rethink its heavy dependence on West Asia for energy after a major global supply shock, ONGC Chairman Arun Kumar Singh has said.

He noted that India relies on the region for a large share of its oil, gas and LPG needs, making it vulnerable to disruptions. Recent geopolitical tensions and shipping route issues exposed these risks, forcing supply adjustments.

Singh called for boosting domestic exploration and production, expanding strategic reserves, and diversifying import sources. He emphasized that energy security must become a priority as global uncertainties rise, urging a long-term shift toward a more resilient and self-reliant energy system.

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ONGC starts gas output from $1 bn Daman project

Oil and Natural Gas Corporation (ONGC) has started gas monetisation from its Daman Upside Development Project, marking a significant step in increasing India’s domestic natural gas production.

The company commenced gas flow from the offshore B-12-24P platform on March 29. The extracted gas is being transported to the Hazira plant in Gujarat, where it will be processed before being supplied to consumers.

Located in the Arabian Sea, the Daman project lies about 180 km off the Mumbai coast. It is part of ONGC’s broader strategy to enhance output from its western offshore assets and reduce reliance on energy imports.

Developed at an estimated cost of around $1 billion, the project has been completed in a relatively short time frame of under two years. ONGC attributed this to improved drilling methods and efficient project execution, including the use of advanced techniques to speed up development.

The start of gas monetisation signals the beginning of commercial production from the field. Output is expected to increase gradually as additional wells are brought into operation in phases over the coming months.

At peak levels, the project is expected to produce around 5 million standard cubic metres of gas per day. Overall, it is estimated to contribute significantly to India’s gas output over its lifecycle.

The development comes at a time when India is focusing on boosting domestic energy production to meet rising demand and reduce dependence on imports. Natural gas is seen as a key transition fuel in the country’s energy mix, supporting cleaner energy goals.

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ONGC posts 16% rise in standalone Q3 profit

Oil and Natural Gas Corporation (ONGC) reported a 16% year-on-year rise in its standalone net profit for the October–December quarter.

The company posted a profit of ₹8,372 crore compared to the same period last year. However, revenue from operations saw a slight decline due to softer crude prices. ONGC’s consolidated net profit rose sharply, supported by improved performance from subsidiaries.

The board also announced a second interim dividend of ₹6.25 per equity share, with February 18 set as the record date. Stable crude production and better gas realisations helped the company maintain strong financial performance during the quarter.

 

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Corporate

Reliance, ONGC partner to share offshore energy assets

Reliance Industries Ltd (RIL) and state-run Oil and Natural Gas Corporation (ONGC) have entered into a strategic partnership to share offshore oil and gas resources, marking a major step towards improving efficiency and boosting India’s domestic energy production. The two companies signed a memorandum of understanding (MoU) during India Energy Week 2026.

The agreement focuses on sharing infrastructure, services and expertise across offshore exploration and production projects, particularly in deepwater and ultra-deepwater areas. Key regions covered under the pact include the Krishna-Godavari (KG) Basin on the east coast and the Andaman offshore blocks, where both RIL and ONGC operate adjoining or nearby fields.

As part of the collaboration, the companies will jointly use high-value assets such as drilling rigs, offshore platforms, processing facilities, pipelines, power systems, and marine infrastructure including platform supply vessels and multi-support vessels. The arrangement also covers specialised services such as well logging, project execution support and other technical operations required in offshore fields.

The primary objective of the partnership is to reduce operational costs, avoid duplication of infrastructure and improve asset utilisation in capital-intensive offshore projects. By sharing resources, both companies expect faster project execution, better logistical coordination and improved safety standards in challenging offshore environments.

ONGC said the MoU is in line with recent policy reforms, including the Oilfields (Regulation and Development) Amendment Act, 2025, which allows greater flexibility for operators to share facilities and infrastructure. The regulatory changes are aimed at encouraging collaboration, attracting investment and accelerating exploration and production activity in India’s oil and gas sector.

The partnership is also expected to strengthen emergency response mechanisms and operational resilience by enabling quicker access to vessels, equipment and technical support during critical situations.

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ONGC may get $500 million from Venezuela

State-run Oil and Natural Gas Corporation (ONGC) could receive around $500 million (about ₹4,100 crore) in long-pending dividends from its investments in Venezuela if the United States eases sanctions on Venezuelan oil, according to market analysts.

The unpaid amount is linked to ONGC’s overseas arm, ONGC Videsh Ltd (OVL), which holds a 40 per cent stake in the San Cristobal oil project in Venezuela. Although the oilfield has generated profits in the past, US sanctions imposed on Venezuela prevented the transfer of dividends to foreign partners, including ONGC.

Brokerage firm Jefferies said that a possible U.S.-led restructuring of Venezuela’s oil sector, along with changes in sanctions policy, could allow these blocked funds to be released. If this happens, ONGC would be able to recover the long-stuck dividends, improving its cash position.

Apart from San Cristobal, ONGC Videsh also owns an 11 per cent stake in the Carabobo oil block in Venezuela. This project has remained largely stalled due to funding issues, sanctions, and operational challenges. Any easing of restrictions could revive investment activity in this asset as well.

Analysts say the potential dividend recovery is not yet factored into ONGC’s stock price, making it an upside trigger for investors. However, they caution that the outcome depends heavily on geopolitical developments and US policy decisions, which remain uncertain.

ONGC has maintained strong financial performance in recent quarters, supported by steady crude oil production and stable energy prices. The possible recovery of Venezuelan dues would add further strength to its balance sheet.

While Venezuela’s oil output is currently limited, even a partial easing of sanctions could benefit global energy companies with legacy investments in the country. For ONGC, unlocking these funds would mark a significant recovery of long-delayed overseas earnings.

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