December 03, 2008

OVL inks pact for 40% stake in San Cristobal oilfield

ET reported that ONGC Videsh Limited has signed an agreement on April 8th 2008 to take 40% stake in the San Cristobal oilfield in Venezuela. As per report OVL has signed the agreement with Petroleos de Venezuela SA, which will hold the remaining 60%, during the historic visit of Mr Murli Deora union petroleum minister to Venezuela.

Under the agreement, OVL and Petroleos will develop the field from its current production level of 20,000 barrels per day to 40,000 barrels per day. 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. Till 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 1 of the top 4 oil producing countries in the world. It has 87.04 billion barrels of proven oil reserves, largest in the western hemisphere.