ONGC to invest $356 mn in Venezuelan oil asset

April 9th, 2008 - 4:09 pm ICT by admin  

(Lead, Changing Dateline)

New Delhi, April 9 (IANS) The overseas arm of Oil and Natural Gas Corp (ONGC) is going to invest $356 million over the next five years to buy a 40-percent stake in a major hydrocarbon asset in Venezuala, it was announced here Wednesday. Under an agreement signed in Caracas late Tuesday, ONGC Videsh Ltd (OVL) will form a 40:60 joint venture with Petroleos De Venezuela to jointly develop the San Cristobal field at Junin in the country’s Orinoco region.

The region holds among the largest known reserves of heavy oil in the world over an area of 54,000 sq km, and the venture will develop the field from its current daily output of 20,000 barrels to 40,000 barrels, officials here said.

The pact was signed in the presence of India’s Petroleum Minister Murli Deora and his Venezuelan counterpart Rafael Ramirez Carreno, with both describing the event as a historic milestone in bilateral cooperation in hydrocarbons sector.

“This is the beginning of relations between our two countries and this will keep getting stronger,” said the Venezuelan minister, who is also the president of Petroleos De Venezuela.

“We are two economies which complement each other almost perfectly from energy point of view,” he said, adding: “India is one of the world’s fastest growing and developing economies with an impressive capacity for refining crude.”

The Indian petroleum minister, who earlier held an hour-long bilateral meeting with his Venezuelan counterpart, hoped the joint venture would pave the way for more such mutually beneficial projects between the two countries.

The pact marks the culmination an agreement for cooperation in the hydrocarbons sector that was signed between the two countries in March 2005, when Venezuelan President Hugo Chavez visited New Delhi.

The two companies said the joint venture will also prospect for more discoveries in the unexplored area of the project and employ enhanced recovery techniques to improve the production of hydrocarbons.

According to the Organisation of Petroleum Exporting Countries (OPEC), Venezuela is one of the largest oil producing countries in the world with about 87 billion barrels of proven conventional oil reserves.

The country also has large non-conventional oil deposits, most of which is the Orinoco oil belt, officials here said.

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