New Delhi: The government on Thursday allowed ONGC Videsh Ltd, the overseas arm of state-run Oil and Natural Gas Corp, to invest an additional $70 million in an oilfield in Brazil, taking its total investment in the project to $748 million.
“The Cabinet Committee on Economic Affairs (CCEA) has authorised OVL to make an additional investment of $70 million, taking the total cash put in BC-10 project to $383 million,” home minister P. Chidambaram said.
The $383 million investment was towards developing the oil reserves in the BC-10 block, off Brazil and did not include the $165 million OVL had paid earlier to acquire 15% stake.
Oil fields in BC-10 are being developed in two phases - Phase-I cost has gone up by $314 million to $2.282 billion necessitating the additional expenditure. Phase-II cost remains same at $1.196 billion.
“OVL’s share at 15% in the total cost would be $748.05 million,” he said.
“OVL’s cash sink is expected to be $383 million (excluding the acquisition cost of $165 million) against earlier estimated cash sink of $313 million,” he said.
CCEA authorised the empowered committee of secretaries for OVL’s projects to approve an additional cash sink of $17.5 million (25% of $70 million) for future use in case there were shortfalls.