Oil PSUs ink agreement to develop Venezuelan fields

The OVL, led consortium of Indian oil PSUs, which include Oil India Limited (OIL) and Indian Oil Corporation (IOC) signed the agreement with Venezuelan national oil firm Petroleos de Venezuela SA (PdV) for the development and production of hydrocarbons from the Carabobo project in the oil rich Orinoco region of Venezuela.

India expects to receive 3.6 million tonnes of crude oil per year once the project takes off, a statement issued by the ONGC said.

The joint venture agreement was signed in Caracas on Wednesday at a ceremony attended by Venezuela President Hugo Chavez Frias and Petroleum Minister Murli Deora.

As per the agreement Spain’s Repsol-YPF SA, Petroliam Nasional Bhd (Petronas) of Malaysia and OVL will hold an 11 percent stake each in the multi-nation consortium.
The IOC and OIL will each hold 3.5 per cent interest in the joint venture firm.

The Corporacion Venezolana del Petroleo (CVP), a unit of PdV, Venezuela’s state oil company, will hold the remaining 60 per cent equity.

The Indian firms will invest $2.181 billion in the joint venture project between 2010 and 2015. Of this, OVL will invest $1.333 billion while IOC and OIL will invest $454 million each.

The Carabobo project envisages production of 400,000 barrels of oil per day when the project becomes fully operational. “The project costs are estimated at 15-20 billion dollars and is one of India’s major investments in Latin America,” ONGC statement said.
The joint venture company called as PetroCarabobo SA will have has a licence term of 25 years, with the potential for a further 15-year extension, to extract oil.