US move on Venezuela oil lifts RIL, ONGC prospects

Indian oil majors, primarily Reliance Industries Ltd (RIL) and ONGC Ltd, could see a revival in business ties with Venezuela after the US pushed for control of the South American nation’s oil sector fol-

- SHUBHANGI MATHUR

Indian oil majors, primarily Reliance Industries Ltd (RIL) and ONGC Ltd, could see a revival in business ties with Venezuela after the US pushed for control of the South American nation's oil sector following the capture of its President Nicolas Maduro on Saturday.

Mukesh Ambani-led Reliance and state-run oil explorer ONGC stand to benefit from the possible US takeover of Venezuelan oil, which could lead to the lifting of sanctions on crude sales from Caracas, said Jefferies, a global investment banking and capital markets firm, in a note.

In 2012, Reliance agreed to buy about 20 per cent of its daily crude requirements from Venezuela’s state-owned oil company PDVSA. The arrangement was discontinued in 2019 after Venezuelan crude was hit by US sanctions.

"With the US announcing it would sell Venezuelan crude to global buyers, Reliance could tie up supplies at a discount to Brent, which could aid its gross refining margins," Jefferies said.