In a big-ticket investment aimed at giving a boost to its holding of oil and gas assets abroad, the Oil and Natural Gas Corporation Videsh Limited (OVL), along with its partners, entered into an agreement with the Venezuelan government on Thursday to develop a $20-billion oil project in that country.

The project is expected to give India 3.6 million tonnes of crude a year. OVL and its partners signed the agreement with Petroleos de Venezuela SA (PdV) for development and production of hydrocarbons from the Carabobo project in the Orinoco region.

The agreement was signed in Caracas in the presence of Venezuela President Hugo Chavez, Petroleum and Natural Gas Minister Murli Deora, Petroleum Secretary S. Sundereshan, ONGC chairman R.S. Sharma, OVL Managing Director R.S. Butoal and IOC chairman B.M. Bansal.

Spain's Repsol-YPF SA, Petroliam Nasional Bhd (Petronas) of Malaysia and OVL each hold a 11 per cent stake in the consortium that will produce 400,000 barrels of oil a day. IOC and Oil India Limited will each have 3.5 per cent interest in the joint venture to develop the Carabobo 1 Norte and Carabobo 1 Centro blocks, located in the Orino Heavy Oil Belt. Corporacion Venezolana del Petroleo, a unit of PdV, will hold the remaining equity. About half of the production from the joint venture, called PetroCarabobo SA, will be upgraded light crude oil for export.

The project cost has been pegged at $15–20 billion.