The government on Friday allowed state-owned ONGC and partners to invest $2.181 billion in a Venezuela oilfield that will give India 3.6 million tonne a year of crude oil.
ONGC Videsh Ltd, the overseas arm of the state explorer, will invest $1.333 billion between 2010 and 2015 as its share of spending in the 400,000 barrels per day ‘Carabobo-1’ project. Indian Oil Corp (IOC) and Oil India will invest $454 million each in the project.
The Cabinet Committee on Economic Affairs (CCEA) cleared the investment by the oil majors that together hold 18% in the Carabobo-1 project, home minister P Chidambaram told reporters after the CCEA meeting here.
The Carabobo-1 project of the Orinoco extra-heavy oil belt of Venezuela would involve a total investment of close to $21 billion over 25 years. The three firms have for the time sought the government’s approval for investing $2.18 billion and may be able to fund most of the future investment from the revenues they will start earning when the project goes on-stream in three years.
Last month, the three won rights to develop Carabobo-1 project along with Spain’s Repsol-YPF and Petronas of Malaysia after committing themselves to pay a signing amount of $1.05 billion and an equivalent to Venezuela’s state-run PdV in loan. Repsol-YPF, OVL and Petronas will each hold 11% stake in the Mixed Company that will develop Carabobo-1, with 7% being split between IOC and OIL. Balance 60% will be with PdV.
