Shares of oil and energy companies opened the week positively amid geopolitical tensions in Venezuela, a key South American oil producer. Reliance Industries Limited (RIL) surged 1% to reach a 52-week high of Rs 1,611.20, while other oil stocks gained up to 2% on Monday. This rise occurred despite global crude prices remaining largely stable due to concerns over supply surplus.
Hindustan Petroleum led the gains with a 1.85% increase, touching an intraday high of Rs 508.45. ONGC shares rose 1.16% to Rs 246.80, Indian Oil Corporation advanced 1.03% to Rs 168.79, and Oil India increased 0.47% to Rs 432.45.
The price movement follows the dramatic removal of Venezuela’s President Nicolas Maduro and his wife in a major US military operation over the weekend. Both were taken to the United States to face charges including narco-terrorism and drug trafficking. US President Donald Trump has committed to managing the country until a “proper” transition of power, adding fresh uncertainty to Venezuela’s oil sector and its international partners.
ONGC remains in focus due to its direct exposure to Venezuelan assets through its overseas arm, ONGC Videsh, which holds equity stakes in two Venezuelan oil projects. Market interest has grown amid speculation that a US-led restructuring of Venezuela’s oil industry could unlock long-overdue cash flows.
Global brokerage Jefferies noted that ONGC may be close to recovering approximately US$500 million in unpaid dividends from its Venezuelan upstream investments. The brokerage highlighted that ONGC has not received dividends from the San Cristobal field production, amounting to over US$500 million. With the US intervention, ONGC could recover these unpaid amounts, subject to easing sanctions and changes in control and marketing of Venezuelan crude.
The unpaid dividends relate to ONGC Videsh’s stake in the San Cristobal field, which continues production but has had profit repatriation blocked by US sanctions. This has forced ONGC to carry these receivables on its books, creating uncertainty for investors about the timing or likelihood of fund recovery.
Jefferies added that any recovery from Venezuela would complement ONGC’s existing cash generation. The company reported a consolidated net profit of Rs 571 billion in FY24, with free cash flow of Rs 473.6 billion and a double-digit free-cash-flow yield. The stock currently trades below book value with a price-to-book ratio of 0.9 and an earnings yield of 18.1% for FY24.
The brokerage also pointed to potential upside from ONGC’s other Venezuelan asset, the Carabobo field in the Orinoco belt, where ONGC holds an 11% stake. Development plans, currently stalled, could resume if operating conditions improve. Jefferies values ONGC’s consolidated operations at 8.2 times forward earnings for December 2026 and has maintained a ‘Buy’ rating with a target price of Rs 310, indicating a 28% upside from the last close of Rs 241.50.
However, Jefferies cautioned that risks include lower Brent crude prices, reduced price realizations for crude and gas, and lower-than-expected production from KG 98/2. The potential recovery of US$500 million in dividends is seen as a medium-term positive catalyst.
Oil India is also under scrutiny due to its 7% stake in Petrocarabobo SA through its subsidiary Oil India Sweden AB, which holds 50% of Indoil Netherlands BV, a joint venture behind Project Carabobo-1.
Reliance Industries remains in focus as it continues to import Venezuelan crude, although reports from March last year indicated a possible halt following a 25% US tariff on countries importing Venezuelan oil. Indian Oil Corporation may also attract attention, with its subsidiary IOC Sweden AB involved in exploration and production projects in Venezuela, alongside a battery technology venture in Israel.
Meanwhile, Brent crude prices showed limited movement, edging up 0.2% to $60.87 as markets weighed the impact of US intervention in Venezuela against OPEC+’s decision to maintain current oil output levels.
Bhupendra Singh Chundawat is a seasoned technology journalist with over 22 years of experience in the media industry. He specializes in covering the global technology landscape, with a deep focus on manufacturing trends and the geopolitical impact on tech companies. Currently serving as the Editor at Udaipur Kiran, his insights are shaped by decades of hands-on reporting and editorial leadership in the fast-evolving world of technology.
