A US-led takeover or restructuring of Venezuela’s oil industry could bring major financial and strategic benefits for India. Analysts and industry sources told The Times of India that India could recover close to USD 1 billion in long-pending payments. The shift could also lift crude output from fields where Indian companies hold stakes.
India was once a key buyer of Venezuelan heavy crude. At its peak, imports crossed 400,000 barrels per day. That trade stopped in 2020 after strict US sanctions made purchases risky and hard to execute. Indian refiners then exited the Venezuelan market.
Sanctions Hit Indian Oil Assets
ONGC Videsh Ltd (OVL), India’s main overseas oil arm, jointly operates the San Cristobal oilfield in eastern Venezuela. US sanctions severely affected operations at the field.
Restrictions blocked access to equipment, technology, and oilfield services. As a result, output fell sharply. Large reserves remained untapped despite being commercially viable.
Venezuela also failed to pay dividends owed to OVL. The unpaid amount includes USD 536 million for OVL’s 40 per cent stake up to 2014. A similar sum for later years remains frozen because Caracas did not allow audits.
Sanctions May Ease After US Intervention
Analysts and energy executives said US sanctions could ease after the American military action that removed President Nicolás Maduro. The move placed Venezuela’s oil resources under US oversight.
US President Donald Trump has said American oil companies would enter Venezuela. Their task would be to repair damaged infrastructure and restart production.
If restrictions lift, OVL could shift drilling rigs and equipment from its Gujarat operations to San Cristobal. Output could then rise sharply. Production may jump from 5,000–10,000 barrels per day to 80,000–100,000 barrels per day with new wells and modern tools.
Renewed exports could also help OVL recover nearly USD 1 billion in unpaid dues. Earlier, OVL had sought a US sanctions waiver, similar to the one granted to Chevron, to operate and export oil.
Scope for Wider Indian Presence
Indian companies could expand further in Venezuela. OVL owns an 11 per cent stake in the Carabobo-1 heavy oil block. Indian Oil Corporation and Oil India each hold 3.5 per cent stakes.
Venezuela’s state oil firm PDVSA is the majority partner in both projects. Analysts said PDVSA may undergo restructuring under US oversight, which could open new opportunities for foreign partners.
Strategic Gains for India
India is likely to return as a major buyer if Venezuelan crude re-enters the market.
“If sanctions are eased… trade flows can resume rapidly,” said Kpler analyst Nikhil Dubey. He noted that Indian refineries can easily process Venezuelan heavy crude.
Before sanctions, Venezuela exported about 707 million barrels of crude each year. India and China together bought 35 per cent of that volume. Exports have since fallen by half.
Analysts said a US-backed overhaul could restore production within a year. That would give India a strong alternative to Middle Eastern oil and improve its bargaining power in global energy markets.