Venezuela: India’s $1 Billion Bet on Oil May Finally Pay Off

Venezuela: A dramatic shift in Venezuela’s political and energy landscape could open an unexpected financial and strategic opportunity for India. Analysts and industry insiders say a US-led takeover or restructuring of Venezuela’s oil sector may allow Indian companies to recover nearly $1 billion in long-pending payments while reviving stranded oil assets that have remained dormant for years under sanctions.

For India, once a major buyer of Venezuelan crude, the moment signals a possible return to a relationship abruptly frozen in 2020 when sweeping US sanctions made trade legally risky and logistically unworkable.

Venezuela: From Key Buyer to Forced Exit

At its peak, India imported more than 400,000 barrels per day of Venezuelan heavy crude, making it one of Caracas’s most important energy partners. Indian refiners were particularly suited to process Venezuela’s dense crude grades, and trade flows had become routine.

That relationship unraveled after US sanctions choked access to shipping, insurance, payments, and oilfield services. Indian refiners withdrew, and upstream investments by Indian firms were effectively stranded.

ONGC Videsh’s Stalled Assets

At the center of the India-Venezuela oil sector equation is ONGC Videsh Ltd (OVL), India’s flagship overseas oil and gas arm. OVL jointly operates the San Cristobal onshore oilfield in eastern Venezuela, a project that once held strong commercial promise.

Production, however, collapsed as sanctions cut off access to drilling rigs, spare parts, and technical services. Output has fallen to just 5,000–10,000 barrels per day, despite the field holding sizeable recoverable reserves.

Venezuela’s financial troubles compounded the problem. According to industry sources, Caracas has failed to pay OVL dividends amounting to $536 million linked to its 40 percent stake in San Cristobal up to 2014. A similar sum is believed to be owed for subsequent years, but payments remain frozen due to the absence of permitted audits.

Venezuela: Why a US-Led Overhaul Changes the Equation

The calculus could change rapidly if US sanctions ease following a dramatic political transition in Venezuela. Analysts suggest that American oversight of Venezuela’s oil infrastructure would allow international operators to re-enter, restore degraded assets, and resume exports under a clearer regulatory framework.

US President Donald Trump has publicly stated that American oil companies would move into Venezuela to repair infrastructure and restart production, signaling a sharp policy pivot.

For OVL, this could mean swift operational revival. Officials familiar with the matter say drilling rigs and equipment could be redeployed from ONGC’s domestic fields in Gujarat to San Cristobal with minimal delay once restrictions are lifted.

With modern technology and additional wells, production from the field could climb to 80,000–100,000 barrels per day, restoring its commercial viability.

Recovering Nearly $1 Billion

US oversight would also reopen export channels for Venezuelan crude, creating a revenue stream through which OVL could recover close to $1 billion in unpaid dues over time, according to analysts.

OVL had earlier sought a specific sanctions waiver similar to the one granted to Chevron, but broader sanctions relief would eliminate the need for piecemeal exemptions and provide long-term certainty.

Wider Opportunities for Indian Firms

Indian participation in Venezuela extends beyond San Cristobal. OVL holds an 11 percent stake in the Carabobo-1 heavy oil block, while Indian Oil Corporation and Oil India own 3.5 percent each. Venezuela’s state-owned PDVSA, the majority partner in these projects, is expected to undergo restructuring under US supervision.

Such reforms could improve transparency, operational efficiency, and payment reliability—key concerns that previously deterred foreign partners.

India’s Strategic Energy Advantage

If Venezuelan exports resume at scale, India is expected to re-emerge as a major buyer. Market analysts note that Indian refineries are among the best equipped globally to process heavy crude, allowing trade flows to restart quickly.

Before sanctions, Venezuela exported around 707 million barrels of crude annually, with India and China accounting for roughly 35 percent of that volume. Exports have since dropped by nearly half.

A production rebound within a year would give India a valuable alternative to Middle Eastern supplies, strengthen its bargaining power in global oil markets, and diversify its energy security portfolio.