Venezuela offering higher oil field stake to ONGC: report

Venezuela is offering ONGC Videsh an increased stake in an oil field where the Indian company already holds about 40 per cent stake, as the cash-starved country seeks to rev up its oil industry and strengthen ties with New Delhi, reports quoting sources close to the development said.

Venezuela's state-owned oil firm Petroleos de Venezuela SA (PDVSA) has proposed sell a 9 per cent stake in the San Cristobal field to ONGC Videsh (OVL), the overseas arm of Oil and Natural Gas Corporation, Reuters reported citing sources.

ONGC Videsh already holds a 40 per cent stake in the PDVSA oil field, which produces around 22,000-23,000 barrels per day (bpd).

For Venezuela, which is struggling under triple-digit inflation and a shortage of products, has been hit hard by the falling price of oil. The sale, although not expected to rake in big money, would be welcome respite for PDVSA.

The OPEC nation's oil output has slipped and PDVSA is struggling to maintain investment in its oilfields, which hold the world's largest crude reserves.

According to the Reuters report, the state-owned company has already offered Russian oil major Rosneft a stake in a joint venture in an extra-heavy crude project in the Orinoco Belt.

The report said PDVSA was still negotiating with ONGC and no deal was available.

The 9 per cent sale would take OVL's stake in the San Cristobal field to 49 per cent, leaving 51 per cent with PDVSA, helping the Veneuzelan government to maintain more than 50 per cent in the oil venture, as required by law.

The report said ONGC is still evaluating the options as its revenues continue to fall due to lower oil prices.

Venezuela's murky legal system, which sometimes goes arbitrary, is also a distraction for investors.