New Delhi, Nov 12 (ANI): The Cabinet Committee on Economic Affairs on Thursday authorized Oil and Natural Gas Company Videsh Limited (OVL) to make an additional investment of USD70 million taking the total cash sink to USD83 million for the project BC-10, Brazil from its own resources without any funding or guarantee support from Government of India.

The CGEA which mete here also authorized the Empowered Committee of Secretaries (ECS) for OVL’s projects to approve an additional cash sink of USD17.5 million in case of advancement of capital expenditure or shortfall in cash sink in respect of Block BC-10 in Brazil.

The Oil and Gas Block BC-10 is located in the Campos Basin approximately 120 kilometers southwest of Vitoria City off the coast of Brazil. Water depths in BC-10 range from 1400 meters on the west side of the Block to 2100 meters on the east side.

The BC-10 license was signed in 1998 with Shell as the operator for license with a 35 percent interest. Other partners of the consortium were Petrobras with 35 percent interest and ExxonMobil with a 30percent interest.

The operator Shell, has now informed OVL that as a result of various factors such as freshly imposed taxes, duties, additional well costs and other contingencies etc. the cost of Phase-I is likely to increase by USD 314 million to USD 2282 million.

For the present, the phase II costs have been estimated at the same level of USD1196 million. Taking the increased project costs into consideration and non-project cost of US D189 million, the total cost of the project as on date is estimated to be about USD 4987 million for both phase-I and II. OVL’s share at 15 percent in the total costs works out to be USD 748.05 million.

The additional investment will give opportunity to OVL to expedite monetization of earlier investments in the project.

The additional investment is expected to provide higher reserve accretion of hydrocarbon and more production from the project to OVL, thereby increasing the energy security of the country. (ANI)