Venezuela's PDVSA to rope in customers to pay $449 million to ONGC

NEW DELHI: Venezuela will pay ONGC Videsh USD 449 million in past dues either by diverting money from existing or new buyers of its crude oil, the state-owned firm said today.

OVL, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), owns 40 per cent of Venezuela's San Cristobal oilfield and had invested about USD 190 million in the project in 2008. Venezuela's national oil firm PDVSA holds the remaining stake.

OVL has not been paid for its share of oil from the San Cristobal field in last few years and the dues touched USD 537 million last year.

"Consequent to the agreements signed in November 2016, Petroleos de Venezuela, S A (PdVSA) has paid an amount of USD 88 million out of USD 537 million and outstanding amount of dividend as of now is about USD 449 million," ONGC said in a regulatory filing.

OVL had received its dividend from sale of crude oil produced from the field totalling USD 56.224 million for 208. But dividends for 2009 to 2013 totalling USD 537.631 million remained unpaid due to cash flow difficulties being faced by PDVSA.

In the regulatory filing, it said a high level delegation from the company held meetings with Venezuelan Petroleum Minister Eulogio Del Pino and PDVSA President Nelson Martinez on November 9 and 10 for compliance of the agreements reached in November last year.

"OVL has been assured that PdVSA is committed to these agreements and payments will be made through existing offtaker channels or through new agreements with the Government owned refineries and accordingly the investment in Venezuela will be protected," the company said.

In November last year, OVL had signed a pact with PDVSA to help arrange USD 318 million financing for the San Cristobal project in lieu of the Latin American nation clearing its past dues through supply of crude oil.

As part of the agreement, OVL will stand guarantee for the San Cristobal joint venture to raise USD 318 million capital required for raising production from the field to 27,000 barrels per day from current 18,000 bpd.

San Cristobal project is located in the Zuata Subdivision of proliferous Hugo Chavez Fria Orinoco Heavy Oil belt, in the Junin Norte Block in eastern Venezuela.

The joint venture was incorporated in April 2008 consequent to a Memorandum of Understanding (MOU) signed in March 2005 in New Delhi to jointly develop oil and gas exploration and production projects in Venezuela.