ONGC may get $500 million in unpaid dividends if Venezuela sanctions lifted; Stock in focus

Shares of Oil and Natural Gas Corporation (ONGC) Ltd. will be in focus on Monday, January 5, after the US attacked Venezuela on Saturday and captured its long-serving President Nicolas Maduro along with his wife.

The attack has also led to the US taking control over Venezuelan oil assets. ONGC has significant exposure to the country's oil assets through its subsidiary ONGC Videsh.

ONGC Videsh has a 40% participating interest in Venezuela's San Cristobal Project. Along with this, OVL, Indian Oil Corporation (IOC) and Oil India, also have a 11% stake in the Carabobo-1 field.

A US takeover of Venezuela's oil industry could mean lifting of sanctions on Venezuelan crude sales, although US President Donald Trump has reiterated that the sanctions remain on Venezuela's oil industry for now.

In case sanctions are lifted and more supply comes into the market, it would mean more supply pressure on prices.

ONGC could receive $500 million of unpaid dividends from the San Cristobal field, which are due up to 2014. After 2014, production came to a halt, which meant no dividends accrued from that period onwards.

On the flip side, brokerage firm Jefferies wrote in its note that a medium-term risk for ONGC would be a revived Venezuelan output, which could pressure global crude prices.

Shares of ONGC ended 1.7% higher on Friday at ₹242. The stock is down 5% in the last 12 months.