India and Venezuela on Thursday discussed encouraging long-term energy contracts between public and private sector oil marketing companies (OMCs) operating in the two countries.

The two nations will explore broadening their economic partnership and trade to encompass cooperation in mining, including critical minerals and pharmaceuticals.

Prime Minister Narendra Modi and visiting Venezuelan acting President Delcy Rodriguez held talks at Hyderabad House in the afternoon.

The discussion focussed on the “perfect complementarity” between the two nations since Caracas, with one of the largest oil reserves in the world, could rely on New Delhi as a “preferred partner.” This is because the Indian economy is a large and growing consumer of oil and will have stable demand growth for many years, Ministry of External Affairs (MEA) officials said.

In recent weeks, India has turned to Venezuela for its crude oil needs as it has diversified energy sourcing because of the blockade of the Strait of Hormuz.

The South American country has emerged as India’s third biggest source of oil in spot buying. India is now, after the United States, the second biggest purchaser of Venezuelan oil.

The two countries will encourage their OMCs to explore long-term contracts, MEA officials said after the meeting between Modi and Rodriguez.

However, the two sides neither signed an agreement nor issued a joint statement.

Rodriquez is on a five-day visit to India. Apart from Delhi, she will also visit Reliance Industries Limited’s (RIL’s) refinery at Jamnagar in Gujarat, and meet leaders of India’s energy sector in Mumbai.

RIL is a leading purchaser of Venezuelan crude. Apart from her discussions with the Prime Minister, Rodriguez also met External Affairs Minister S Jaishankar and Petroleum and Natural Gas Minister Hardeep Singh Puri.

Rodriguez is a devotee of spiritual guru Sathya Sai Baba, and will visit Sathya Sai’s ashram Prasanthi Nilayam in Puttaparthi, Andhra Pradesh.

She had gone to the ashram during her previous visits to India, including in 2019 and 2023, when she was here to attend the G20 Summit, and also in 2024.

On Thursday, the two sides also discussed cooperation in both upstream and downstream energy projects.

Rudrendra Tandon, Secretary (East), in the MEA, said Venezuela has traditionally been a close friend of India and sees India as a “preferred partner” in the energy sector.

Indian officials said there was no credence to speculation that India’s purchase of Venezuelan oil was under pressure from another country. They maintained that the conflict in West Asia, which disrupted India’s energy supplies, prompted India’s OMCs to purchase oil from wherever it was available.

“The government is aggressively seeking new sources of crude oil and energy to ensure India’s energy security. Venezuela is an opportunity and it is very much a part of our plan,” Tandon said.

The US captured Venezuelan President Nicolas Maduro in January, and controls proceeds from Venezuelan oil sales through bank accounts administered by the Treasury Department.

The Indian side also flagged the issue of Venezuelan public sector undertakings owing over $ 500 million in dividends to ONGC Videsh. Venezuela is a resource-rich country, and cooperation in mining of critical minerals, gold, diamongs and other materials was also discussed between the two sides, the MEA official said. On whether the discussion featured Venezuelan President Maduro’s detention by US forces, Tandon said, “We all know that there was a transition in Venezuela. We are working with a government that is friendly, that wants a partnership with India. We want to reciprocate that. And do not forget that Venezuela has traditionally been very close friend of us, both bilaterally as well as international level.”

Venezuela was a major source of India’s crude oil until FY 2019-20, when imports were discontinued following US sanctions. Imports from Venezuela resumed in FY 2023–24, before being halted again due to the re-imposition of sanctions. Indian public sector undertakings (PSUs) established a partnership with the National Oil Company of Venezuela, PDVSA, and Indian PSUs have maintained a presence in that country since 2008.

ONGC Videsh Limited (OVL) and Corporacion Venezolana del Petroleo (subsidiary of PDVSA) had a joint venture called “PetroleraIndovenezolana SA” for the production and exploration of oil in the San Cristóbal field, in which OVL had 40 per cent stake, while PDVSA had 60 per cent of the remaining stake. The OVL investment in the San Cristóbal project was approximately $ 200 million.