NEW DELHI: ONGC Videsh Limited (OVL), the overseas arm of ONGC, on Friday said it has stepped up efforts to recover divideds stuck in Russia and Venezuela due to the US sanctions.
OVL announced that its proposal to the US for a waiver to operate in Venezuela is in advanced stage and likely to be approved.
Speaking to the media, Rajashri Gupta, MD of OVL, stated the company has sought a ‘specific licence’ to operate in Venezuela, similar to the one granted to Chevron. Though the Office of Foreign Assets Control (OFAC) of the US has imposed sanctions on Venezuela, Chevron is permitted to operate in the country.
ONGC is seeking to recover $500 million in dividends pending since 2014 for its stake in Venezuelan projects. Alternatively, the company is willing to import oil instead of receiving the payment. OVL owns a 49% stake in Venezuela’s operational San Cristobal project and an 11% stake in under-development Carabobo project, both operated by Petróleos de Venezuela, S.A. (PdVSA).
“We are in discussions with the government of Venezuela to take charge of operations of the two projects there. At the same time, we have been interacting with OFAC. They have given us some comfort that we can conduct certain operations subject to preconditions. We have sought a specific license to operate in Venezuela,” Gupta said.
US sanctions-related banking restrictions on Moscow have also hindered OVL’s efforts to pay its share of the abandonment fund for Russia’s Sakhalin-1 field. This has obstructed the company’s path to regaining a 20% share in the oilfield.
“The initial directive was that the fund had to be paid in US dollars. We have requested that it be changed to Russian Rubles,” Gupta said. Abandonment funds are used to operate or decommission a well or facility that is non-compliant with regulations, where the licensee or permittee fails to comply.
The inability to pay the fund has prevented Russia from transferring the project shares to OVL, Gupta said. As a result, dividends worth upwards of $630 million remain stuck.