ONGC Videsh Ltd (OVL), the overseas subsidiary of ONGC, has approached RBI for permission to pay the first instalment of about $ 350 million to Russian National oil company Rosneft for the $ 1.7 billion deal to acquire 20 per cent stake in the field, official sources said. The instalment, to be paid next month, includes the premium amount of $225 million and $ 92.3 million for past expenditure incurred on exploration of the field.

OVL would acquire half of Rosneft's 40 per cent stake in Sakhalin-I, which is likely to be developed by 2005, for $ 1.4 billion consideration. "The upfront payment would be made after RBI gives due approval to the overseas investment," sources said.

While Rosneft currently holds 40 per cent stake in the around $ four billion project, Japanese Sodeco and ExxonMobil of US have 30 per cent each.The agreement would ensure an equity oil of about 2-4 million tonnes besides 5-8 million cubic meter per day of gas, sources said.

The exploration is likely to be completed by middle of next year and development would begin soon after. The Russian Far East Sak-halin oil field is estimated to have 2-8 billion barrels of oil reserves. As part of the agreement, OVL would invest in development D Financing Rosneft's participation in the project until it generates positive cash flow, sources said.

The consortium of Rosneft-Sodeco and Exxon-Mobil havealready invested $ 200 million on evaluation of drilling and seismic operations, sources said, adding oil production from the field would begin by 2005, while gas would start flowing by 2006. At peak plateau production, the oil production from the field was expected to work out to about 8-12 million tonnes per annum and that of gas production to about 20-30 million cubic meters per day.