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| RIL to buy oil from OVL's Venezuela project |
| Press Trust of India / New Delhi Mar 15, 2010, 16:01 IST |
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Reliance Industries and Mangalore Refinery and Petrochemical Ltd (MRPL) have committed to buy up to 45 per cent of the crude oil ONGC Videsh Ltd and its partners plan to produce from a Venezuelan oilfield.
The overseas arm of Oil and Natural Gas Corp (ONGC) and partners - Spain's Repsol YPF, Malaysian state Petronas, Indian Oil Corp and Oil India Ltd, had last month won the Carabobo-1 heavy oilfield in Venezuela.
The consortium would invest $8.8 billion in developing the oilfields and another $12.1 billion in the upgrader.
OVL, Repsol and Petronas all have an 11 per cent stake each in the project, while IOC and OIL have 3.5 per cent each. The rest 60 per cent is held by Petroleos de Venezuela (PDV).
Sources said of the planned output, Repsol had indicated it can take 165,000 barrels per day while Petronas said it could take 100,000 bpd. The remaining 220,000 bpd was split equally between OVL and OIL.
OVL's share of 110,000 bpd would go to ONGC's subsidiary MRPL, while RIL said it would take OIL's share for at least 10 years from the date the upgrader starts up in 2016-17.
A RIL spokesperson declined to comment.
Originally, OVL had planned to bid for the Venezuelan oilfield along with RIL but it later dropped out and was replaced by Repsol and Petronas.
Sources said OVL and partners feel the Venezuelan project may produce oil till 2034, which may stretch to 2049.
The Carabobo-1 project is estimated to hold combined around 30 billion barrels of inplace oil reserves.
Partners would initially invest about $4.85 billion with future requirements being funded out of crude sales.
The initial investment include $1.05 billion for the signature bonus the companies will have to pay Venezuela government and $1.05 billion as a loan to PDV.
The Carabobo-1 project, comprising Carabobo-1 Central and Carabobo-1 North blocks, would develop extra-heavy crude production capacity of up to 480,000 barrels per day. Early output of at least 50,000 bpd is slated to start in 2012-13, rising to peak in 2016.
The project investment include cost of constructing a heavy crude upgrader that can turn Orinoco's tar-like oil into valuable synthetic crude. The 200,000-bpd upgrader may be built at Soledad in Anzoategui state to produce synthetic crude of 32 degree API or higher by 2015-16.
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