In a note, Jefferies highlights that “ONGC has not been paid its share of dividends from production at San Cristobal, totalling more than US$500mn.” The brokerage adds that “with the US stepping in, ONGC may stand to recover these unpaid amounts,” hinging the upside on a prospective US takeover of Venezuela’s oil industry and an associated easing of sanctions.
Jefferies argues that the recovery of these dues would come on top of robust existing cash generation, noting that ONGC reported consolidated net profit of Rs 571 billion in FY24, with free cash flow to firm (FCFF) at Rs 473.6 billion and a double‑digit FCF yield. The stock, it points out, still trades below book, with FY24 price‑to‑book at 0.9 times and an earnings yield of 18.1%, metrics that leave room for re‑rating if Venezuela cash flows are unlocked.
Venezuela assets back in focus
The unpaid dividends stem from ONGC’s investment in the San Cristobal field in Venezuela, held through its overseas arm ONGC Videsh. While the project has been producing, US sanctions on Caracas effectively blocked repatriation of profits, forcing ONGC to carry the receivable on its books and leaving investors sceptical about the timing and certainty of recovery.
Jefferies notes that a change in the control and marketing of Venezuelan crude could alter this calculus. “With the US stepping in, ONGC may stand to recover these unpaid amounts,” the report reiterates, framing the potential inflow as a non-trivial cash event against a consolidated net debt position of Rs 776.9 billion at the end of FY24 and a net-debt-to-EBITDA multiple of just 0.7 times.
Beyond the San Cristobal receivables, Jefferies also underlines the option value embedded in ONGC’s second Venezuelan asset. “It might also be able to develop the Carabobo field in Venezuela’s Orinoco belt; ONGC has an 11% equity stake in the field,” the analysts write, suggesting that a friendlier operating and funding environment under US oversight could revive stalled capex plans.
In valuation terms, Jefferies values ONGC’s consolidated business at 8.2 times December 2026 forward earnings, maintaining a ‘Buy’ rating with a price target of Rs 310, implying 28% upside from the last close of Rs 241.50. The brokerage cautions, however, that “lower Brent, lower crude/gas price realisations, and/or lower-than-expected production from KG 98/2 are key downside risks,” even as it positions the possible US$500 million dividend release as an additional medium‑term catalyst.