ONGC Videsh Limited (OVL)-led consortium on Thursday announced that it had bagged 40 per cent stake in a $19-billion project to develop a major crude oil block in Venezuela.

OVL, Indian Oil Corporation (IOC) and Oil India Limited (OIL) along with Spain’s Repsol YPF SA and Malaysia’s Petroliam Nasional Bdh won rights to develop the Carabobo-1 block in Venezuela’s Orinoco Belt, according to a statement issued here.

To invest $9 billion

An official said that the consortium would pay $1.05 billion to Venezuela as the signing amount and initially invest another $9 billion in developing the block that could produce four lakh barrels of oil a day. The total spending on the block over 25 years would be $19 billion. Besides, it would extend $1.05 billion credit to Venezuela’s state oil company Petroleos de Venezuela SA (PdVSA), which would have 60 per cent interest in the project.

OVL, Repsol and Petronas will have 11 per cent share each in the Empresa Mixta which will develop the Carabobo-1 Norte and Carabobo-1 Centro blocks located in the Orinoco Heavy Oil Belt, while IOC and OIL will split a 7 per cent stake in the project equally. OVL, IOC and OIL will seek the government approval to invest $2.45 billion — their share of signature bonus loan to PdVSA and phase-I development cost.

Since signature bonus is to be paid by only the foreign firms, the share of OVL, IOC and OIL would be $472.5 million or 45 per cent of $1.05 billion. They will also contribute a similar amount to PdVSA as their share of credit.

The licence agreement for the block that is likely to start production in three years would be signed on March 25.

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