KOLKATA (miningweekly.com) – India’s hopes of recovering an estimated $600-million to $700-million from Venezuela on behalf of its oil industry have dimmed following the social and economic unrest in the Latin American country.

Even India's proposal to offset the dues against oil imports from that country has not received any response from Venezuela, which is battling economic, civil and political upheavals.

Indian government officials have pointed out that little headway has been made on proposals to recover Indian dues, which was the subject of discussion during talks between oil Ministers of the two countries last month.

While the Venezuelan government does not have cash to pay the dues to India, proposals of barter trade between the two countries wherein dues could be offset against crude oil imported by private refiners – Reliance and Essar – with sovereign facilitation by the Indian government have failed to evoke any response from Caracas, with the latter facing grave political uncertainties.

Officials concede that diplomatic engagements between the two countries, which could have led to a resolution of the payments imbroglio, have also weakened following downgrading of India’s participation at the forthcoming Non-Alignment Movement Summit in Caracas.

It was learnt that Prime Minister Narendra Modi was reluctant to attend the summit, citing geopolitical reasons and instead, India would be represented by Vice President Hamid Ansari, officials said.

India’s dues from Venezuela are largely accounted for by ONGC Videsh Limited (OVL), the overseas arm of national oil and gas exploration and production major ONGC Limited. OVL controls 40% of the San Cristobal oilfields, but has not received its share of revenues for oil sold from the field for the last two and a half years.

There has been no response either to a proposal by India that OVL be permitted to buy Venezuelan crude equivalent to the outstanding payment due.

The Latin American country is India’s fourth largest supplier of crude oil accounting for 12% of India’s crude oil requirements and shipping in an estimated 24-million tons in the last financial year.

Officials conceded that the political and economic turbulence in Venezuela have made it difficult to follow up bilateral talks.

The talks between the oil Ministers of the two countries last month had also put on the table plans for Indian oil companies to step up exploration and production investments in Venezuela, but these would now be have to be put on the backburner, a government official said.

Citing the exiting of oil companies from that country, including services major Schlumberger, which earlier this month pulled out workers and projects after heightened unrest in Venezuela, an official said that Indian projects and investments would have to wait for economic and political stability in the Latin American nation.