The government has allowed Oil India (OIL) to form a special purpose vehicle (SPV) with Indian Oil Corporation (IOC) for undertaking overseas projects including acquisition and exploration.This was announced by finance minister P Chidambaram during a briefing today on the cabinet committee on economic affairs (CCEA) meeting last night.The CCEA has also mandated that proposals for all exploration and production projects would be jointly undertaken by OIL and downstream oil PSUs, and would be brought before an empowered committee of secretaries (ECS) like the mechanism available to ONGC Videsh (OVL).The CCEA meeting also approved a proposal of OVL to invest $820 million for acquiring ExxonMobil's stake in an oil field located off the Brazilian coast."The CCEA has authorised OVL to invest, in the event of it being the successful bidder, up to $820 million in Project Sugarloaf," Chidambaram said.OVL, the overseas arm of state-owned Oil and Natural Gas Corporation (ONGC), would pay $330 million for acquiring the full equity of Exxon's Brazilian subsidiary, and the remaining $490 million would be OVL's share of the development cost.Exxon holds stake in two offshroe blocks in the Campos basin off the Brazilian coast. It has a 30% stake in block BC-10 where an oil discovery with potential reserves of 400 million barrels has been made. BC-10 has Royal Dutch/Shell as the block operator and the Brazilian national oil firm Petrobras as the other partner.
