According to a PTI report, a possible US-backed restructuring of Venezuela’s oil industry could deliver a meaningful financial and strategic gain for India, including recovery of nearly US$1 bn in long-pending dues and a restart of crude production from fields involving Indian companies.
Here are three oil stocks that stand to benefit in some way as tensions ease, following the possibility of a US restructuring.
#1 ONGC
ONGC Videsh Ltd serves as the overseas arm of Oil and Natural Gas Corp. Ltd (ONGC), focusing on international oil and gas exploration, development, and production.
According to reports, ONGC Videsh has a 40% stake in the San Cristobal onshore oilfield in eastern Venezuela, where PdVSA holds 60%.
Although the field is considered commercially viable, US sanctions on Venezuela have blocked access to the rigs, equipment, and services needed to sustain output, and the wells have effectively dried up.
According to reports in the Financial Express, Venezuela failed to pay ONGC Videsh $536 million in dividends due on its 40% stake in the field up to 2014, and a near-equivalent amount for the subsequent period for which the Venezuelan authorities refused to permit audits, effectively freezing the claims settlement.
Should the US decide to change the status quo, ONGC could benefit.
In Q2 FY26, the company clocked revenues of ₹157,911 crore compared to ₹159,331 crore YoY. ONGC reported a net profit of ₹12,275 crore in quarter compared to ₹9,853 crore. Its subsidiaries, HPCL and MRPL, are primarily responsible for the rise in net profits.
Moving ahead, the management of ONGC anticipates that oil production will reach 20 million metric tonnes in FY26. On the other hand, for gas production the estimated quantity is 21.5 BCM, which would be marginally lower than projected.
ONGC has in the past faced issues with declining and mature fields. However, with BP-led TSP advancing for the redevelopment of the MH Field, a scheme for the revival of KG-98/2 and the combined Western Offshore Development Plan, ONGC is positioned to counterbalance declines from mature fields.
The accelerated monetisation of new hydrocarbon discovery alongside a sharper focus on deepwater and ultra-deepwater exploration is expanding ONGC’s resource base.
#2 Reliance Industries
The company is a major Indian multinational conglomerate, with diverse business operations spanning petrochemicals, refining, oil and gas exploration, retail, telecommunications, and digital services.
Reliance Industries stands to gain from easing US-Venezuela tensions through renewed access to discounted Venezuelan heavy crude oil, which its Jamnagar refinery is optimised to process.
This could boost gross refining margins amid potential sanction relief or US-led restructuring of Venezuela’s oil sector.
On the financial front, Reliance Industries reported revenues of ₹258,898 crore in Q2FY26, against ₹235,481 crore in the corresponding period last year. Net profit surged to ₹22,146 crore in Q2FY26, from ₹19,101 crore YoY.
Moving ahead, the business is currently advancing quickly in the clean energy sector. Reliance Industries intends to use a fully integrated, internationally competitive clean energy platform to achieve net carbon zero by 2035.
The Dhirubhai Ambani Green Energy Giga Complex is expected to be one of the world’s largest integrated renewable manufacturing hubs.
Reliance Industries just put its first solar GW+ line into service. The company is well on its way to establishing 10 GW fully integrated solar PV manufacturing from polysilicon to ingot and wafer to cell/module, along with glass and encapsulant, and then expanding it in a modular fashion.
#3 Indian Oil Corporation (IOC)
IOC is India’s largest integrated oil marketing company and a leading downstream player in the energy sector. It dominates the domestic fuel retail market with a vast network of refineries, pipelines and fuel stations.
According to reports, IOC has the requisite complexity to process the Venezuela crude oil grades and blend efficiently.
Easing tensions could enable spot or term imports at discounts to Brent, improving gross refining margins amid diversified crude slates.
IOC reported revenues of ₹206,447 crore for Q2FY26 against ₹198,615 crore YoY. The net profits were ₹7,479 crore against a loss in the corresponding period of the previous year.
Moving ahead, IOC plans to invest ₹1.66 trillion over the next five years to expand its core operations in oil refining and fuel marketing, along with ventures in petrochemicals, natural gas, and renewable energy.
According to a report in the Business Standard, to strengthen supply, the company’s pipeline network will be expanded to 22,000 km through 21 ongoing projects, including new storage facilities in Nepal.
Conclusion
Some companies, like ONGC, through its subsidiary, stand to gain from easing tensions on the US-Venezuela front. However, given the huge scale that these companies already have, one will have to see if the benefits are worthwhile.
Apart from this, there still needs to be clarity on the policy front regarding whether there will be sanction relief from the US.
Careful analysis of company fundamentals, regulatory environment, and sector trends is essential before investing.
Investors should evaluate the company’s fundamentals, corporate governance, and valuations of
the stock as key factors when conducting due diligence before making investment decisions.
Happy Investing.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com
