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Venezuela Stops Oil Project Payment To Indian Firm, Owes $444M

offshore rig

Crisis-hit cash-strapped Venezuela has stopped payments due to the overseas arm of India’s top oil explorer for a joint Venezuelan project, which has resulted in the Latin American country piling debt of US$444 million to the Indian company.

ONGC Videsh Ltd (OVL), the overseas unit of India’s Oil and Natural Gas Corporation (ONGC), holds 40 percent in the San Cristobal energy project in Venezuela, while state firm PDVSA owns the remaining 60 percent.

“They paid us three installments and have not paid any money for more than six months,” OVL’s managing director Narendra Verma said at a news conference.

According to OVL, Venezuela’s PDVSA has not paid dividends from the project to the Indian firm between 2009 and 2013, while no dividends have been declared after that.

In November 2016, the Indian company signed a deal with PDVSA for the Venezuelan firm to clear the sum it owes in installments.

“We received three installments totaling $88 million but subsequent ones have stopped,” Verma told reporters.

“We want them to honour the agreement (to pay past dues) as the financing of the project is linked to that. Otherwise, the project will die,” the manager said.

As part of the ‘payment in installments deal’ from 2016, OVL agreed to help PDVSA to raise US$318 million financing for the San Cristobal project, while the Venezuelan company agreed to supply 17,000 bpd of crude oil in order to repay the US$537 million owed to OVL.

“We are telling them to allot oil for us in lieu of the dues,” OVL’s Verma said on Thursday.

Meanwhile, collapsing Venezuela has reportedly offered India a 30-percent discount on crude oil purchases, but only if India agrees to pay in El Petro.

India doesn’t plan to use Venezuela’s ‘petro’ cryptocurrency to pay for crude oil imports from the Latin American nation, Indian Foreign Minister Sushma Swaraj said earlier this week.

By Tsvetana Paraskova for Oilprice.com

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  • charLEL on June 05 2018 said:
    I dont know about Petro but I buy other cryptocurrencies. I trust in Bitcoin, Litecoin and Ethereum most. Buying all of them eeasily not on stocks anymore but on eshop (i rec ccshop.info)., they also have some other coins. I dont think I would want Petro maybe just for fun :)
  • S Holmes on June 02 2018 said:
    Now, here is an explanation why Venezuela can afford to offer a 30 percent discount on oil deliveries to India, if India pays in 'Petro':
    If interational minority partners, who are allowed to have a minority share of up to 40 percent in venezuelan oil projects, are not paid their share on crude oil sales, it is of course no problem to offer a 30 percent discount.

    On the other hand, India is one of the main (paying) customers for oil from Venezuela; If Indian companies are not paid the money they should receive from Venezuela, how long will India go on buying oil from Venezuela.

    Maduro & Co seem to be experts at killing the goose which lays golden eggs.
  • John Scior on June 01 2018 said:
    I believe I read in another article that Maduro was wanting OPEC to help out with restoring Venezuela's oil output. We see from the information here how well he treats those who have helped him in the past. Its not a matte rof IF the regime will collapse, but WHEN !

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