A cartel of state-run oil companies will invest around $2.25 billion initially in development of a giant oil project in Venezuela, which will provide India an annual supply of 3.6 million tonnes of crude oil
State-run Oil and Natural Gas Corp (ONGC) and its partners Indian Oil Corp (IOC) and Oil India Ltd (OIL) will invest around $2.25 billion initially in development of a giant oil project they won in Venezuela last week, reports PTI.
The Carabobo-1 project of the Orinoco extra-heavy oil belt of Venezuela would involve a total investment of $19 billion over 25 years. The three state-run companies have for the time being sought a government nod for investing $2.25 billion.
Official sources said that ONGC Videsh Ltd, the overseas unit of ONGC, IOC and OIL, may be able to fund most of the future investment from the expected revenues when the project goes on stream in three years.
Last week, the three companies won rights to develop the Carabobo-1 project along with Spain's Repsol-YPF and Petronas of Malaysia after committing a signing amount of $1.05 billion and an equivalent to Venezuela's state-run PdV in a loan.
Repsol-YPF, OVL and Petronas will each hold 11% stake in Carabobo-1, with 7% being split between IOC and OIL. The balance 60% will be with PdV.
The project will give India 3.6 million tonnes of crude oil annually out of the envisaged output of 400,000 barrels a day.
Sources said that the $2.25 billion investment would cover OVL-IOC-OIL's share of $472.50 million in the signature bonus as also their initial instalments of the loan to PdV and capital expenditure in the project.
The entire signature bonus is to be borne by Repsol, Petronas and the three Indian companies in proportion to their shareholding.
Of the $2.25 billion initial investment proposed, $1.13 billion would come from OVL while IOC and OIL would put in about $433 million-$435 million each.
Sources said that the investment proposal would first go to the Empowered Committee of Secretaries (ESC) before going to the Cabinet for final approval.
The Carabobo-1 project, comprising Carabobo-1 Central and Carabobo-1 North blocks, would develop extra-heavy crude production capacity of up to 400,000 barrels per day (20 million tonnes a year). Early output of at least 50,000 bpd is slated to start in 2012-13, rising to a peak in 2016.
The project investment of $19 billion includes 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.
Since signature bonus is to be paid by only foreign firms, the share of OVL, IOC and OIL would be $472.50 million or 45% of $1.05 billion. They will also contribute a similar amount to PdV as their share of credit.
The Videocon Group is planning to start a 500MW power plant in its homeland and is looking for suitable land as well as a coal-transportation solution
Videocon Group, a consumer electronics giant, is planning to set up a 500MW power plant in its homeland, Maharashtra. It also expects to achieve financial closure for its Gujarat-based 1,200MW power plant by end-March.
“We are planning a power plant in Maharashtra,” said SM Hegde, director, Videocon Group. While declining to divulge further details, Mr Hegde said, “The exact location has not been finalised as land acquisition is the main concern for any power project, so we have to look into the land availability issue and other issues like coal transportation.”
Speaking about the group’s Gujarat-based 1,200MW power project, he said, “The financial closure for the first phase of 600MW has been achieved; the second phase’s financial closure is getting completed. After financial closure, power projects take another three and a half years to be commissioned,” he added.
Meanwhile, the Videocon Group is still awaiting financial closure for its 1,000MW power plant located in Chhattisgarh. The project sanctioned by the state government is still in the clearance phase which involves environmental clearances and coal-linkage issues.
Coal linkages for the group’s Gujarat project have been secured through coal imports from Indonesia. However, coal supply to the power plant planned in Chhattisgarh will be sourced from coal blocks in that area.
The group also has plans for a power plant in West Bengal. “Once the financial closure for the Chhattisgarh project is completed, we will move on to the other projects like the one in West Bengal,” added Mr Hegde.
The joint venture project, launched in 2006, has finally received necessary permissions, but the JV partners are not sure about the future of residential space in the planned construction
Two years after launching an ambitious plan, Hyderabad-based ‘Jubilee Hills Landmark Projects’ will finally see the light of day. ICICI Venture Funds Management Co Ltd and Nagarjuna Construction Co Ltd, the joint venture partners, have decided to start the construction of the project within the next three months.
“We have got most of the permissions in place and we will be commencing construction in the next three months,” said Sanjeev Dasgupta, president for real estate, ICICI Venture.
The project was launched three years ago. However, due to the slowdown in the realty market, the joint venture partners were not sure about the viability of such a high-end project. The civic authorities were also not very co-operative while giving the necessary permissions.
“Hyderabad has gone through lot of changes in the last eighteen months in its development regulation which has blocked most of the approvals for new developments,” said Mr Dasgupta.
The project is coming up at a prime location, near the 350-acre KBR Park in Hyderabad, with a five-star deluxe hotel, service apartments, retail showrooms and premium residential space. This project was supposed to start in 2006 but could not take off as the group failed to get the required permissions in place.
Again, due to lacklustre demand for high-end projects during the past one year in Hyderabad, most developers stayed away from such projects. During the last year, the city witnessed sales of only affordable homes or those in the price range of Rs15 lakh to Rs30 lakh, said an industry source.
ICICI Venture and Nagarjuna are planning to start with the hotels, which will include retail showrooms. However, the partners are still not sure about developing the premium residential space, which they had planned. They want to wait and watch the market for some time before taking action on the residential project.