On 4 November, India’s ONGC (Videsh) Ltd – OVL and Venezuelan national oil company PdVSA signed two agreements. PdVSA currently owes ONGC about $600 million and will ‘give a volume of crude every month... total dues will be squared off in a couple of years.’ Funds from crude oil sales by PdVSA are to be deposited in an escrow account. ONGC agreed to invest $ 318 million to increase production in the Orinoco San Cristobal field, from around 18,000 bpd to 27,000 bpd. India holds a 40% stake in the Petrolera Indovenezolana joint venture since 2008. These agreements, after years of Indian diplomatic lobbying, should help OVL recover its dividends and stay in the highly promising Venezuelan oilbelt.
Venezuelan oil production has been falling. It is on the 3-nation committee set up on 30 November to monitor OPEC’s decision to reduce production by 1.2 million bpd from 1 January 2017. Venezuela itself is to reduce production by 95,000 bpd. Indian oil imports from Venezuela have also fallen. From April to September 2016 India imported only $2.2 billion, compared to $5.68 billion in 2015-16. PdVSA, heavily in debt, has mortgaged or sold a number of its foreign assets recently, and is fighting suits over assets expropriated by the Chavez regime.
On 28-29 November the Ministry of External Affairs, CII, the United Nations Economic Commission for Latin America and the Caribbean, and the Government of Jalisco, Mexico, jointly organised an India-LAC Conclave in Guadalajara, Mexico. The Indian delegation of 70 members, including Indian companies operating in the LAC region was led by MOS External Affairs, Gen V K Singh. Mexico is increasingly a focus of Indian business.
A report titled ‘Doing Business in Latin America and the Caribbean’ by India’s Engineering Exports Promotion Council, released in November, aims to spread awareness about the opportunities in Latin America for Indian businesses. Pointing out that more than 100 Indian companies have invested over $12 billion in the LAC region in mining, metals, agriculture, petrochemicals, pharmaceuticals, plastics and manufacturing, the report, after a recent EEPC visit to the region, calls for more attention to prospects in LAC for Indian business.
January 5, 2017