KOLKATA (miningweekly.com) – India and Venezuela will push for deeper engagement and joint ventures (JV) in the hydrocarbon sector during Venezuelan President Nicolas Maduro’s visit to New Delhi next month.

Despite US sanctions against the Latin American nation, New Delhi is expected to follow its “own balanced and pragmatic foreign policy approach in the interest of developing greater energy security by deepening transactional and financial collaboration with Venezuela”, officials here said.

Maduro is scheduled to visit India on March 10 and 11 to attend the summit of the International Solar Alliance (ISA), a collaboration of 21 nations to promote solar energy.

Maduro is also slated for a bilateral meeting with Indian Prime Minister Narendra Modi during which the two countries are expected to negotiate outstanding issues in the hydrocarbon sector and explore opportunities of new JVs between Venezuelan national oil companies and Indian government and private oil companies.

High on the agenda of the bilateral talks will be increasing the purchase of Venezuelan crude oil by Indian national oil marketing and refining companies, led by Indian Oil Corporation (IOC). While the Latin American nation is a prime source of crude oil imports for India, such trade transactions are largely confined to private Indian refiners, like Reliance Industries and Essar.

The meeting between the two heads of State is expected to lay the ground-work for subsequent signing of new agreements for higher volume crude imports by Indian refiners like IOC, Bharat Petroleum and Hindustan Petroleum, officials said.

The new purchase agreements between the two countries would be part of a resolution of outstanding debt, a vexed issue between the two countries over the past few months, the official added.

ONGC Videsh, the overseas arm of ONGC, in 2016 picked up a 40% equity stake in the San Cristobel oilfields project entailing an investment of $200-million. However, Venezuelan national oil exploration and production company Petreos de Venezuela SA (PDVSA) had an outstanding payment of $537-million to ONGC Videsh, which the former has defaulted on following the sovereign default of Venezuela.

PDVSA last year offered to offset the default amount through exports of crude oil, but this could not be followed up on in absence of new purchase agreements between Indian government refiners and PDVSA.

Sources indicated that a satisfactory resolution of the outstanding debt at the highest level could lead to commitment of further investments by ONGC Videsh in the San Cristobel asset. ONGC has already sought that the latter oilfields increase production to 27 000 bbl/d from about 18 000 bbl/d.

The sources said that to increase production from San Cristobel, PDVSA was keen to have a JV with its existing buyer, Reliance Industries, a proposal which was expected to be touched upon during talks of the two head of State.

To further expand Indian direct investments in Venezuela, the bilateral talks were expected to push ahead with development of the Ornico oilfields, which was offered to ONGC Videsh a few years ago, through a government-to-government memorandum of understanding.

However, sources said that despite the scheduled high-level engagements, a close diplomatic watch was being kept on the US's stated option of imposing fresh oil sector sanctions on Venezuela just ahead of April elections in which Maduro would seek extension of his mandate.