ONGC Videsh conditions financing of Venezuelan field on clearing dues

Source: The Hitavada      Date: 14 Jun 2018 11:55:39



ONGC Videsh (OVL) has conditioned arranging for finances for remediating and raising oil production at Venezuela’s San Cristobal field on the cash-strapped Latin American nation clearing its past dividend dues. The firm’s parent, State-owned Oil and Natural Gas Corp (ONGC) in a regulatory filing said Venezuela has not paid OVL USD 449 million (about Rs 3,305 crore) of accrued dividend for four years.OVL has 40 per cent stake in the San Cristobal field, which produces around 18,000 barrels of oil per day. Venezuelan national oil company Petroleos De Venezuela S.A. (PDVSA), which holds the remaining 60 per cent stake, has not paid the dividend to Indian firm since 2009.

In response to comments sought by stock exchanges over a PTI story on Venezuela stopping dividend payments to OVL, ONGC said Venezuela had in November 2016 agreed to pay USD 537.63 million of dividend due for 2009 to 2013, in installments. In lieu, OVL agreed to help PDVSA arrange USD 318 million financing for the San Cristobal project. “Though ONGC Videsh Ltd (OVL) received its dividend of USD 56.22 million for 2008, dividends for 2009 to 2013 totalling USD 537.63 million remained unpaid. The dividend for 2014 and onwards is yet to be declared by the shareholders,” ONGC said in the filing.

OVL and PDVSA through their relevant subsidiaries signed two definitive agreements for facilitating redevelopment of the San Cristobal joint venture project in Venezuela on November 4, 2016.“The agreements provide for a mechanism to liquidate OVL’s outstanding dividends from the San Cristobal project (USD 537.63 million). So far PdVSA has paid USD 88.42 million in accordance with the dividend payment agreement signed in November 2016. The balance dividend to be paid is about USD 449 million,” it said. ONGC said that further payment of USD 100 million in dividend was awaited.