India’s state-owned ONGC Videsh (OVL) has reportedly turned down an option to buy an additional stake in the San Cristobal field in Venezuela.

The company chose to reject the offer as it fears Venezuela might use it as an excuse to not clear $449m of past dues, the Press Trust of India (PTI) reported citing an unnamed official.

OVL already owns a 40% interest in the San Cristobal field, located in the Zuata sub-division of Orinoco heavy oil belt in Venezuela and produces around 18,000bpd of oil.

Last year, oil and gas firm Petroleos de Venezuela (PDVSA) offered an additional 9% stake in the field to OVL because the Latin American nation is experiencing an economic crisis amid a fall in oil prices.

The official was quoted by the news agency as saying: “Cash-strapped PDVSA hasn’t been able to pay our dues and the additional stake may be used to settle the dues. We don’t think that is what we want. We want our dues to be cleared first.”

“We want our dues to be cleared first.”

The dues relate to accrued dividend from the field for four years. PDVSA owns the remaining 60% stake in the field.

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Under a deal agreed in November 2016, Venezuela agreed to pay a dividend of $537.63m for the period between 2009 and 2013 in multiple instalments, the official added.

In exchange for the dividend, OVL agreed to help arrange financing of around $318m to fund the San Cristobal project.

In November, OVL also signed two definitive agreements with PDVSA to facilitate redevelopment of the San Cristobal joint venture project.

The official further stated: “The agreements provide for a mechanism to liquidate OVL’s outstanding dividends from the San Cristobal project ($537.63m). So far PDVSA has paid $88.42m in accordance with the dividend payment agreement signed in November 2016. The balance dividend to be paid is about $449m.”

In April, OVL received an assurance from Venezuela regarding the start of dividend payments.

In Venezuela, OVL also holds an 11% stake in the Carabobo project in the Orinoco region.