New Delhi: ONGC Videsh Ltd (OVL), along with steel baron Lakshmi N Mittal, will invest $155 million in a gas block in Trinidad and Tobago and another $282 million in two exploration blocks in Brazil.
ONGC Mittal Energy Ltd, the joint venture between ONGC Videsh (OVL), the overseas arm of state-run Oil and Natural Gas Corp (ONGC), and Mittal Energy, had last year bagged the NCMA-2 offshore block in Trinidad and Tobago.
The Cabinet Committee on Economic Affairs (CCEA) gave its approval to OVL on 26 June to make its share of investment in the block.
Minister of State in Prime Minister’s Office Prithviraj Chavan said OVL had been authorised to invest $137 million in Block SM-1413 and another $145 million in Block ES-470 off the Brazil coast.
While Trinidad and Tobago investments are being made expecting a minimum rate of return of 14%, the same in Brazil was being done at minimum 16%.
The CCEA authorised Ministry of Petroleum and Natural Gas to give specific approval to ONGC for providing funding and guarantee support, in excess of 30% of ONGC’s networth, in all the three blocks, subject to the requirements by OVL without seeking budgetary support from the government.
On account of any cost escalation in the future, CCEA authorised the Empowered Committee of Secretaries (ECS) to approve an additional investment of up to 30%.
The CCEA also authorised ECS to allow OVL Board to partner any regional players for sharing risk and leveraging experience in the exploration of the blocks.