India’s Jindal Power exits crude oil processing deal with PdVSA

India’s energy giant Jindal Power Ltd has pulled out of a deal that would have seen it operate Petroleos de Venezuela’s (PdVSA) key facilities to process heavy crude for export, Bloomberg he reported. In May, Jindal entered into a joint venture with PdVSA in the Petrocedeno project located in the oil-rich Orinoco Belt. The $300 million deal to refurbish and upgrade equipment was Jindal’s first foray into the oil sector.

The deal’s collapse is illustrative of the challenges Venezuela faces in trying to revive its beleaguered oil and gas sector amid domestic political turmoil and crippling US sanctions. In July, the US Office of Foreign Assets Control (OFAC) eased some sanctions against Venezuela but maintained sanctions against the PdVSA. OFAC has issued a new license allowing certain transactions related to the export or re-export of liquefied petroleum gas (LPG) to Venezuela until July 8, 2025. However, transactions with state-owned oil and natural gas company Petróleos de Venezuela, SA Venezuela company in which PdVSA holds a share of 50 percent or more, remain prohibited under the sanctions imposed by various executive orders.

OFAC’s announcement came weeks before Venezuela’s disastrous election.

Maduro and his proxies tampered with election results, falsely claimed victory, and carried out widespread repression to maintain power. Washington acknowledges that opposition contender Edmundo González Urrutia received the most votes, noting that the Maduro-controlled National Electoral Council (CNE) failed to back up its announced results by producing original tally sheets, as it did after the 2013 and 2018 elections, despite repeated calls from Venezuelans and the international community. A Venezuelan judge even issued an arrest warrant for Gonzalez, 75, a former diplomat, for failing to appear three times to answer questions on charges including conspiracy and falsification of election-related documents.

The sanctions have been adverse to Venezuela’s oil sector: Venezuela’s crude production has fallen from 3.2 million bpd in 2000 to 735,000 bpd today, largely due to export restrictions and poor maintenance. Instead, crude oil production in neighboring Argentina has surged, with libertarian President Milei vowing to shake up the system.

By Alex Kimani for Oilprice.com

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