OVL gets CCEA nod for abroad investment

New Delhi: ONGC Videsh (OVL), the overseas investment arm of ONGC, has got the Cabinet Committee on Economic Affairs (CCEA) nod for investing $437 million in exploratory blocks in Trinidad and Tobago, and Brazil. OVL 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 (OMEL) a joint venture between OVL and the LN Mittal Group had won the NCMA-2 offshore block in Trinidad and Tobago. Briefing news persons after the CCEA meeting, the Minister of State in Prime Minister’s Office, Mr Prithviraj Chavan, said “OVL has been authorised to invest $155 million in the first exploration phase of block NCMA-2 in offshore Trinidad and Tobago with IRR (internal rate of return) of more than 14 per cent.”

CCEA has authorised the Empowered Committee of Secretaries to allow OVL to farm out a suitable share in the block for sharing risk and leveraging experience in the region to an experienced player, should the same be considered appropriate by the OVL Board or OMEL as the case may be.

Mr Chavan said OVL has also been authorised to invest $137 million in block SM-1413 and $145 million in block ES-470 (total $282 million), respectively, in the first exploration phase of these offshore blocks in Brazil with IRR more than 16 per cent. CCEA has allowed OVL to partner any regional player for sharing risk and leveraging experience in the exploration of these blocks.

Further, it has authorised the Ministry of Petroleum and Natural Gas to give specific approval to ONGC for providing funding and guarantee support, in excess of 30 per cent of ONGC’s networth, in all the three blocks, subject to the requirements by OVL without seeking budgetary support from the Government.

It has also authorised the Empowered Committee of Secretaries to approve an additional investment of up to 30 per cent by OVL in these blocks in case of cost escalation in the future.