OVL gets nod for investment in Venezuela, Qatar

The Union Cabinet today approved investments of $458 million by ONGC Videsh (OVL), the overseas investment arm of Oil and Natural Gas Corporation (ONGC), in exploration projects in Venezuela and Qatar.

ONGC Videsh will invest $356 million to pick up 40 per cent stake in the San Cristobal oilfield in Venezuela, the government said in a statement.

Venezuelan national oil company Petroleos de Venezuela (PDVSA) will own the remaining 60 per cent stake.

The investment includes a signing bonus of $174 million and capital expenditure $182 million in the project, the statement said.

This is ONGC Videsh's first investment in the Latin American country, which is the world's fifth-largest oil exporter. Venezuela is also a member of the Organisation of the Petroleum Exporting Countries (Opec).

The field is currently producing about 24,000 barrels per day, with ultimate recoverable reserves in the project area estimated by a joint team of ONGC Videsh and PDVSA at 232.38 million barrels that can yield up to 1 lakh barrels of oil per day.

The Cabinet also approved ONGC Videsh's proposal to invest upto $102 million in Najwad Najem field in Qatar. ONGC Videsh won a stake in the field in March 2005 after it bid for the block in 2004.

The Najwat Najem oil structure is located in the Arabian Gulf in offshore Qatar at a distance of about 100 km north-east of Doha. The 120 sq km acreage is located in the eastern offshore in Qatar.

ONGC shares today closed at Rs 979.35 on the National Stock Exchange, down 3.7 per cent from its previous close in a weak market.