ONGC Team To Invest In Venezuela (17-Feb-2010)
For the development of giant oil project in Venezuela bagged by - Oil and Natural Gas Corp (ONGC), Indian Oil Corp (IOC) and Oil India Ltd (OIL) where initially they are eyeing to invest around $2.25 bn.
Last week, these companies have bagged the Venezuela project where it would be developed by the joint cooperation of these companies.
The Carabobo-1 project of the Orinoco extra-heavy oil belt of Venezuela would involve a total investment of $19 bn over the time-span of 25 years.
A company official said ONGC Videsh Ltd, IOC and OIL may be able to fund most of the future investment from the revenues earned, once it goes on stream in 3 years down the line.
Last week, these 3 Indian firms bagged the propject to develop Carabobo-1 project along with Spain''s Repsol-YPF and Petronas of Malaysia after committing a signing amount of $1.05 bn and an equivalent to Venezuela''s state-run PdV in loan.
Repsol-YPF, OVL and Petronas will hold 11 % stake each in Carabobo-1, with 7 % being split between IOC and OIL. Remaining 60 % will be with PdV.
The project will give India 3.6 mn tons of crude oil annually out of the predicted output of 400,000 barrels a day.
The $2.25 bn investment would include OVL-IOC-OIL''s share of $472.5 mn in the signature bonus as also their initial instalments of the loan to PdV and capital expenditure in the project.
Out of the $2.25 bn initial investment proposed, OVL will contribute $1.13 bn while IOC and OIL would put in about $433-435 mn each.
The entire signature bonus is to be bear by - Repsol, Petronas and the 3 Indian firms in proportion to their shareholding.
Before going to the Cabinet for the final approval, the investment proposal would first go to the Empowered Committee of Secretaries (ECS).
The Carabobo-1 project, comprising Carabobo-1 Central and Carabobo-1 North blocks, would develop extra-heavy crude production capacity of up to 400,000 barrels per day i.e. 20 mn tons per year. Early output of at least 50,000 barrels per day is schedule to start in 2012-13, rising to peak in 2016.
The project investment of $19 bn includes cost of constructing a heavy crude upgrader that can turn Orinoco''s tar-like oil into valuable synthetic crude. The 200,000 barrels per day upgrader may be built at Soledad in Anzoategui state to produce synthetic crude of 32 degree API or higher by 2015-16.
The share of OVL, IOC and OIL would be $472.5 mn or 45 % of $1.05 bn. They will also contribute a similar amount to PdV as their share of credit.
Moreover, ONGC, for its proposed 700 MW power plant at Tripura, has tied-up Rs 2,224 crore debt from Power Finance Corp (PFC).
However, PFC will provide a term loan of Rs 2,223.8 crore to ONGC Tripura Power Co Ltd.
It is a joint venture of ONGC, IL&FS and the Government of Tripura which is setting up the 2x363.3 MW gas based power plant at Pallatana in Tripura.
Previously, Oil and Natural Gas Corporation (ONGC) Chairman and Managing Director R S Sharma stated that it will spend Rs 26,000 crore on capital expenditure in the next fiscal.
Its capital expenditure in this fiscal is Rs 24,000 crore where most of the budget will be spent on exploration and modernization plans.
Meanwhile, its Chairman and Managing Director R.S. Sharma stated that gas production from 2 off-shore deep water wells in Krishna-Godavari basin would start in 2011 and from another 2 wells in 2012.
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