ONGC Videsh Chasing Foreign Governments to Clear $712 Million Dues: Report

New Delhi: From Venezuela to Sudan, ONGC Videsh Ltd, India's flagship overseas oil investment firm, is chasing foreign governments to get its $712 million (over Rs 4,700 crore) of dues cleared.

While Venezuela owns over $421 million in unpaid dividend on oil from San Cristobal project, Sudan is to pay OVL $192.31 million for oil it bought from its Greater Nile Oil Project and another $98.94 million in an unpaid pipeline rent lease, official sources said.

In Venezuela, OVL, a subsidiary of state-owned Oil & Natural Gas Corp (ONGC), had in April 2008 acquired 40 per cent stake in San Cristobal oil project. Corporacion Venezolana del Petroleo (CVP), a unit of state-owned Petroleos de Venezuela SA (PDVSA), owns the remaining stake.

With an investment totalling $408.35 million, OVL's share of crude oil production from the the 160.18 km acreage in the Orinoco Heavy Oil belt was 0.645 million tonnes in 2014-15.

OVL received $56.224 million as dividend on profit made by CVP in 2008 but dividends for 2009 to 2012 totalling to $421.51 million remained unpaid due to cash flow difficulties being faced by PDVSA/CVP.

Sources said the issue is being pursued at government to government level since last year but so far Venezuela has not indicated when the dues will be cleared.

The slump in oil prices with rates halving to below $50 per barrel has added to the problems as Venezuela is finding it difficult to meet its budget.

OVL had in 2003 acquired a 25 per cent interest in Greater Nile Oil Project in Sudan. China's CNPC holds a 40 per cent stake in the project while Malaysia's Petronas has 30 per cent and Sudapet of Sudan the remaining 5 per cent.

GNOP consisted of the upstream assets of on-land Blocks 1, 2 & 4 spread over 49,500 sq km in the Muglad Basin, located about 780 km South-West of the capital city of Khartoum in Sudan. The crude oil produced from oil field of GNOP, is transported through a 1504-km pipeline to Port Sudan at Red Sea.

Upon secession of South Sudan from Sudan in July 2011, the contract areas of Blocks 1, 2 & 4 which straddle between Sudan and South Sudan was split with major share of production and reserves are now situated in the South Sudan.

Post-secession, as the Government of Sudan's share of total production from Sudan was not sufficient to meet requirements of local refineries, foreign firms were asked to sell their share of crude oil to it.

However, the payment of dues on account of crude oil purchased by the Government of Sudan has not been received, they said, adding that OVL's share of the outstanding dues is about $192.31 million as of March 31, 2015. OVL's share of oil production from GNOP, Sudan was 0.7 million tonnes in 2014-15.

OVL had along with state-owned Oil India Ltd constructed and financed a 741-km multi-product pipeline from Khartoum refinery to Port Sudan for $194 million. OVL's share of project cost was 90 per cent while the rest was borne by OIL.

The pipeline was handed over to Government of Sudan in October, 2005. The lump sum price, together with lease rent was to OVL in 18 equal half yearly instalments effective from December 2005.

While payment of 11 half-yearly instalments due till December, 2010 was received from the Government of Sudan, the remaining seven instalments, due from June 30, 2011 to June 30, 2014, are yet to be released, source said.

OVL, whose share of investment in the project was $158.01 million, has been following up for realisation of $98.94 million from Government of Sudan at various levels.