The government today allowed ONGC Videsh (OVL) to spend $359 million (Rs 1,651 crore) for oil exploration in two deep-sea blocks in Nigeria over the next five years.
OVL, the overseas investment arm of state-run Oil and Natural Gas Corporation (ONGC), will spend $195 million in block OPL 279 and $164 million in block OPL 285 in the oil-rich African nation, said an official statement issued after a meeting of the Cabinet Committee on Economic Affairs.
The company had won the two blocks through ONGC-Mittal Energy (OMEL), a joint venture with steel czar Lakhsmi Mittal.
OMEL plans to spend $389 million on OPL 279 and $399 million on OPL 285.
The CCEA approved OVL's share of investment in the two blocks, the statement said.
The investment in OPL-279 and OPL-285 includes signature bonus of $65 million and $50 million to be paid to the Nigerian government for the respective blocks.
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OMEL, in which OVL holds 49.98 per cent stake, Mittal Investments 48.02 per cent and SBI Caps 2 per cent, won the two Nigerian blocks in the 2006 round in return for downstream commitments of $6 billion either in power, rail or refining.
"The entire requirement of OVL's share of investment in the project would be met by OVL from its own resources and/or by borrowings from domestic/international market, without any budgetary support from the government," it added.