ONGC Videsh Ltd (OVL), the overseas arm of state-owned oil exploration major ONGC; will invest more than $400 million in Trinidad and Tobago (T&T) and Brazil.
ONGC Mittal Energy Limited (OMEL), the joint venture between OVL and a group of steel baron Lakshmi N Mittal, would make an investment of $155 in North Coast Marine Area (NCMA)—2 offshore block in the Caribbean country which it had bagged last year.
Separately, ONGC will invest $282 million in two exploration blocks in Brazil.
Cabinet Committee on Economic Affairs (CCEA) on Thursday gave its approval to OVL to make these investments. While Trinidad and Tobago investments are being made on an estimated minimum rate of return of 14 per cent, the investments in Brazil are expected to yield a return of 16 per cent.
The CCEA authorised Petroleum and Natural Gas Ministry 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.
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 per cent.
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.
“ECS will be authorised 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,” Chavan said.