OVL, Reliance, IOC in talks for $16-18 bn Venezuela project

NEW DELHI: Oil and Natural Gas Corp (ONGC), Reliance Industries and Indian Oil Corp (IOC), the nation's biggest companies, are coming together for the first time, to bid jointly for a vast oilfield in Venezuela, which will require an investment of $ 16-18 billion.

ONGC Videsh Ltd, the overseas arm of the state explorer, is talking to Reliance, IOC and Oil India for jointly bidding for a 40 per cent stake in a field in the vast Orinoco heavy crude oil belt.

"We are evaluating the three massive fields that are on offer and will decide on bidding shortly," a top OVL official said here.

Fields in the Carabobo region of the Orinoco belt would produce tar-like oil, which would need to be upgraded to higher-quality synthetic crude. Venezuelan state-run Petroleos de Venezuela SA (PdVSA) will retain the remaining 60 per cent.

"The investment required is massive. The crude upgrade facility alone will cost $ 6-8 billion and so we are looking at partnership with other companies," he said.

IOC may take a 2.5-5 per cent stake while OIL has been assigned a 2.5 per cent stake. The remaining 32.5-35 per cent will be split almost equally between OVL and Reliance.

Each of the three fields on offer can produce 2,00,000 to 4,00,000 barrels of oil per day (10-20 million tonnes a year).