Govt approves OVL investments in Venezuela & Qatar

New Delhi: The Government has approved plans by ONGC Videsh Ltd (OVL), the overseas investment arm of ONGC, to invest up to $458.21 million in oil and gas projects in Venezuela and Qatar.

The Cabinet on Monday gave its nod to OVL for forming a joint venture company with CVP/Petroleos De Venezuela S.A. (PDVSA) for development of San Cristobal field with an invest of up to $356 million. It has also authorised OVL to invest up to $102.21 million in Najwat Najem project, Qatar.

Based on the recommendations of an empowered committee of secretaries (ECS), the Cabinet has authorised OVL for formation of a joint venture company with PDVSA, Venezuela, for development of San Cristobal field located in Orinoco oil belt.

OVL can make this investment directly or through its existing/new wholly owned subsidiary with an investment not exceeding $356 million. This investment includes signature bonus of $174 million and capex of $182 million in the venture.

According to an official statement, the project provides OVL the opportunity to obtain significant equity ownership (40 per cent) in the Venezuelan project. This is the first equity investment by OVL in the oil-rich Latin American country. The Cabinet has authorised the ECS to approve extra investment of up to 25 per cent of the original capital investment out of the revenues from the project, provided the rate of return remains over 10 per cent.

The Government has also authorised OVL to invest $102.21 million in the Najwat Najem appraisal, development and production sharing agreement, Qatar project.