Crisis-hit cash-strapped Venezuela has stopped payments due to the overseas arm of India’s top oil explorer for a joint Venezuelan project, which has resulted in the Latin American country piling debt of US$444 million to the Indian company.

ONGC Videsh Ltd (OVL), the overseas unit of India’s Oil and Natural Gas Corporation (ONGC), holds 40 percent in the San Cristobal energy project in Venezuela, while state firm PDVSA owns the remaining 60 percent.

“They paid us three installments and have not paid any money for more than six months,” OVL’s managing director Narendra Verma said at a news conference.

According to OVL, Venezuela’s PDVSA has not paid dividends from the project to the Indian firm between 2009 and 2013, while no dividends have been declared after that.

In November 2016, the Indian company signed a deal with PDVSA for the Venezuelan firm to clear the sum it owes in installments.

“We received three installments totaling $88 million but subsequent ones have stopped,” Verma told reporters.

“We want them to honour the agreement (to pay past dues) as the financing of the project is linked to that. Otherwise, the project will die,” the manager said.

As part of the ‘payment in installments deal’ from 2016, OVL agreed to help PDVSA to raise US$318 million financing for the San Cristobal project, while the Venezuelan company agreed to supply 17,000 bpd of crude oil in order to repay the US$537 million owed to OVL.

“We are telling them to allot oil for us in lieu of the dues,” OVL’s Verma said on Thursday.

Meanwhile, collapsing Venezuela has reportedly offered India a 30-percent discount on crude oil purchases, but only if India agrees to pay in El Petro.

India doesn’t plan to use Venezuela’s ‘petro’ cryptocurrency to pay for crude oil imports from the Latin American nation, Indian Foreign Minister Sushma Swaraj said earlier this week.

By Tsvetana Paraskova for Oilprice.com

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