ONGC Videsh Ltd will provide $318 million financing to help raise output at a Venezuelan oilfield after the Latin American nation signed a pact to supply 17,000 barrels per day of crude oil to India to clear past dues.
OVL, the overseas arm of state-owned ONGC, owns 40 per cent of Venezuela’s San Cristobal oilfield and had invested about $190 million in the project in 2008. State-run Petroleos de Venezuela SA (PDVSA) holds the remaining stake.
“We will stand guarantee to raising of the $318 million capital required for investing in the San Cristobal project,” OVL CEO and Managing Director Narendra K Verma said.
OVL and Venezuelan state oil company PDVSA signed the deal to finance increased crude production at the joint venture Petrolera Indovenezolana, SA, which operates the San Cristobal oilfield.
The financing will help boost production at San Cristobal field to 30,000-35,000 bpd from current 19,000-20,000 bpd, he said.
Verma said PDVSA has agreed to supply 17,000 bpd of crude oil till the repayment of the $537 million it owes to OVL. “The crude oil will be supplied till such time that the dues are fully cleared,” he said.
OVL has not been paid for its share of oil from the San Cristobal field in the past few years.
The San Cristobal project covers an area of 160.18 sq km in Venezuela. The field output is down from a peak of 38,000 bpd.