ONGC Hopes To Pursue $400 Mn Unpaid Dividend As Venezuela Sanctions Ease
Indian oil and gas major ONGC is attempting to recoup unpaid dividends from a Venezuelan oilfield worth about USD 413 million.
This action follows the recent easing of sanctions on the Latin American nation, as reported by the Indian media. It may be recalled that recently, the US Treasury Department lifted some of the sanctions aimed at Venezuela's gas and oil industry.
This relief is provided through a new six-month licence that permits transactions within the country's oil and gas industry. The licence is only granted if Venezuela is able to carry out certain obligations that result in an impartial election process for the forthcoming presidential election.
Furthermore, the US government has made adjustments to two other licences to eliminate the ban on secondary trading of certain Venezuelan sovereign bonds and PDVSA debt and equity.
Nevertheless, the prohibition on primary trading in the Venezuelan bond market remains in force.
ONGC Videsh, the overseas investment subsidiary of the state-owned Oil and Natural Gas Corporation (ONGC), holds a 40 per cent stake in the San Cristobal oilfield situated in the Orinoco Heavy Oil Belt in eastern Venezuela.
The project is a collaborative effort between OVL and Petroleos de Venezuela SA (PdVSA), which is the national oil company of Venezuela.
In November 2016, OVL and PdVSA entered into two definitive agreements aimed at the redevelopment of the project. These agreements included a mechanism for settling the outstanding dividends owed to OVL, totaling USD 537.63 million.
As part of the arrangement, OVL agreed to extend loans of up to USD 60 million to facilitate the project's remediation plan. Under this loan agreement, OVL disbursed a sum of USD 17.11 million and, as of March 31, 2023, received a portion of the outstanding dividends amounting to USD 124.81 million.
However, due to the sanctions in place, these agreements had come to a standstill, leaving a pending balance of USD 412.82 million in unpaid dividends.
