OVL wants 49% stake in San Cristobal field

ONGC Videsh (OVL), the overseas investment arm of petroleum exploration major Oil and Natural Gas Corporation (ONGC), wants the Venezuelan government to raise its stake in San Cristobal field in its country to 49 per cent.

Venezuela, through its national oil company Petroleos de Venezuela (PDVSA), has offered OVL 30 per cent stake in the onshore field.

Minister for Petroleum Murli Deora has shot off a letter to Venezuela's Minister of Energy and Petroleum Rafael Ramirez Carreno, who is also the President of PDVSA, to "reconsider the decision and offer a participating interest of up to 49 per cent, instead of 30 per cent".

In the letter, Deora has said the 49 per cent stake would be "befitting the growing cooperation" between the two countries. He said that after the visit of the Venezuelan President Hugo Chavez to India in March 2005, OVL was given an assurance that it would be offered a 49 per cent stake in the San Cristobal field.

However, in January this year PDVSA Vice-President Luis P Vierma had told reporters in New Delhi that OVL would be offered a 30 per cent stake in the field. The decreased participating interest has turned out to be a sore point.

Meanwhile, Venezuela has also invited ONGC to participate in quantification and certification of reservoirs for the Junin block in the Orinoco belt.

Venezuela is the world's fifth largest crude oil producer. Its national oil company "� PDVSA "� is also the fifth largest crude oil producing company in the world and the fourth largest refiner.

In March 2005, India and Venezuela had signed an umbrella agreement for cooperation in the hydrocarbon sector. The onshore San Cristobal oilfield has the potential to produce 100,000 barrels of oil a day.

Experts believe that accelerating development of the petroleum sector could make Venezuela Latin America's wealthiest country within the next decade. Much of this development is expected to come through foreign commercial ties.