US control of Venezuelan oil could unblock India’s $1 billion dues

The imminent US takeover or restructuring of Venezuela’s oil sector could benefit India immensely and bring unexpected financial and strategic gains for Delhi. Either of the two moves by the US may unlock nearly $1 billion in long-pending dues and resume access to crude supplies cut off by sanctions more than five years ago. Until the sanctions came into effect in 2020, Indian refiners were among the largest buyers of Venezuelan heavy crude and imported more than 400,000 barrels per day at peak levels. However, that flow stopped once US sanctions tightened, raising compliance risks and freezing payments linked to Indian investments in Venezuela.

How is India’s $1 billion stuck in Venezuela

India’s ONGC Videsh Limited (OVL) holds a 40 per cent stake in the San Cristobal onshore oilfield in eastern Venezuela. The field is still commercially viable, but production stopped once sanctions blocked access to rigs, equipment, and services needed to sustain output.

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Venezuela did not pay OVL $536 million in dividends due up to 2014, while a similar amount is owed for later years, but audits for that period were never cleared by Caracas, freezing settlement. Together, those unpaid claims amount to around $1 billion.

The situation could change after the US captured Venezuelan President Nicolás Maduro in a swift military operation and placed the country’s oil sector under American oversight. The change in control could lead to sanctions relief or new operating licences, allowing foreign partners to return.

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How will US control unlock India’s dues?

If restrictions are eased, OVL could redeploy drilling rigs from India, including from fields operated by its parent, Oil and Natural Gas Corporation, to resume its production at San Cristobal, currently estimated at 5,000–10,000 barrels per day, but could rise to 80,000–1,00,000 barrels per day with additional wells and use of modern equipment.

Thereon the revival of exports would allow OVL to recover its unpaid dues directly from oil revenues.

OVL had sought a special sanctions waiver, similar to the licence granted by the US Office of Foreign Assets Control to Chevron, but the request did not progress.

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Other investments from India in Venezuelan oil sector

Besides San Cristobal, Indian firms have stakes in the Carabobo-1 heavy oil block, where OVL owns 11 per cent, while Indian Oil Corporation and Oil India Ltd hold 3.5 per cent each, while Venezuela’s national oil company Petróleos de Venezuela SA remains the majority shareholder in both.

Experts foresee PdVSA restructuring under US oversight, and while its stake may be transferred to a US-backed entity, international partners like OVL and Spain’s Repsol are likely to remain involved due to their operational experience and market access.

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US President Donald Trump has said major American oil companies would return to Venezuela to repair degraded infrastructure and restore production, but it is unlikely that all existing foreign partners will be sidelined.

India’s major refiners, including Reliance Industries, Nayara Energy, IOC, HPCL-Mittal Energy, and Mangalore Refinery, are technically equipped to process heavy Venezuelan crude in blend.

Venezuela exported 707 million barrels a year before sanctions tightened, and India and China accounted for more than a third of that trade, while the US absorbed about 32 per cent. By 2025, exports fell to 352 million barrels, and China emerged as the dominant buyer with a 45 per cent share.