Commodity Online

NEW DELHI: OVL, the overseas investment arm of ONGC, will sign an agreement on Tuesday to take 40 per cent stake in Venezuela s the San Cristobel oilfield.

OVL will sign the agreement with Petroleos de Venezuela S.A. (PdVDA) during Petroleum Minister Murli Deora s visit to Venezuela.

According to a statement issued here, OVL said both the companies would develop the field from its current production level of 20,000 barrels per day to 40,000 barrels per day, company officials said.

OVL will make a total investment of USD 355.738 million comprising signature bonus of USD 173.1 million for the stake. Besides, ONGC would also be required to sanction a loan of USD 355.74 million for the project that covers 160.16 square kilometers and is located in Junin in the Orinoco Heavy Oil belt of Venezuela.

The production from San Cristobal field started in October 1981. Until date 44 wells have been drilled, of which 24 are active. The field is producing about 24,000 barrels of oil per day.

Ultimate recoverable reserves in the project area have been estimated by a joint team of ONGC and PDVSA at 232.38 million barrels that can yield up to 100,000 barrels of oil per day.

Capital expenditure as per the business plan mutually agreed by OVL and PDVSA would be USD 446.13 million.

Venezuela, the only OPEC member from Latin America, is one of the top four oil producing countries in the world. It has 87.04 billion barrels of proven oil reserves, largest in the western hemisphere.