OVL will hold 11% stake while IOC and OIL will each have 3.5% interest in the joint venture firm
India’s flagship overseas explorer ONGC Videsh Ltd (OVL) and its partners have signed an agreement to develop a $20 billion oil project in Venezuela that will give energy-deficient India 3.6 million tonnes a year of crude, reports PTI.
On May 12, OVL and its partners inked an agreement with Venezuelan national oil firm Petroleos de Venezuela SA (PdV) for the development and production of hydrocarbons from the Carabobo project in the Orinoco region of Venezuela.
The joint venture agreement was signed in Caracas at a ceremony attended by the President of Venezuela, Hugo Chavez Frias, a statement by Indian Oil Corporation (IOC), a member of the consortium said.
Spain's Repsol-YPF SA, Petroliam Nasional Bhd (Petronas) of Malaysia and OVL, the overseas investment arm of state-run Oil and Natural Gas Corporation (ONGC), each hold an 11% stake in the consortium that will produce 400,000 barrels of oil per day.
IOC and Oil India (OIL) will each have 3.5% interest in the joint venture firm to develop the Carabobo 1 Norte and Carabobo 1 Centro blocks (collectively called Carabobo-1), located in the Orinoco Heavy Oil Belt.
The Corporacion Venezolana del Petroleo (CVP), a unit of PdV, Venezuela's state oil company, will hold the remaining 60% equity. About half of the production from the joint venture, called PetroCarabobo SA, will be upgraded into light crude oil for export.
"The project costs are estimated at $15-$20 billion and is one of India's major investments in Latin America," the statement said. The joint venture company has a licence term of 25 years, with the potential for a further 15-year extension, to extract oil.
After the signing ceremony, India’s oil minister Murli Deora met Chavez to explore the possibility of sourcing Venezuelan crude for new refinery capacities coming up in India.
"Discussions were also held on the possibility of award of the Junin Norte block, where new oil reserves are being certified by OVL (to Indian firms)," the statement said.
The Indian firms will together invest $2.181 billion in the 400,000 bpd project between 2010 and 2015. Of this, OVL will invest $1.333 billion, while IOC and OIL will invest $454 million each.
Early output of at least 50,000 bpd is slated to start in 2012-13, before rising to its peak in 2016.
The project cost includes $12.8 billion for 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 make synthetic crude of 32 degree API or higher by 2015-16.
Venezuela had offered seven blocks in the Carabobo area, with combined oil-in-place estimated at around 128 billion barrels. The blocks were grouped into three projects, with each project expected to produce a plateau of 400,000 barrels of 8 degree API oil per day for 40 years.
Of the three projects put up for auction, bids were received for only two—one by the consortium led by the Indians and the other by Chevron Corp of US.
The companies were required to pay a minimum signing bonus of $500 million to access the reserves and provide a $1 billion loan to PdV to begin operations.
In February, the Indian trio won the right to develop the Carabobo-1 project along with Repsol-YPF and Petronas after committing themselves to pay a signing amount of $1.05 billion and making an equivalent amount available to Venezuela's state-run PdV as a loan.
The Carabobo projects, along with similar ventures with Italy's Eni SpA, China National Petroleum Corp and a group of Russian companies in the neighbouring Junin field, are central to Venezuela's plans to boost waning oil output by 2.9 million barrels a day by 2017.
Financing for the blocks will be covered 30% through international loans, 40% from the minority partners and the remaining 30% from initial output.
The Carabobo area, located in the eastern section of the Faja, has a massive resource potential and is part of an extensive reserve certification process led by PDVSA. The US Geological Survey, in a recent report, has estimated the mean volume of recoverable heavy oil in Faja to be as high as 513 billion barrels, which is one of the few global opportunities open to private investment.
Presently, long-haul vessels are unable to stop in India, which forces importers and exporters to spend an extra $150 million a year ferrying goods to and from Colombo, Singapore or Dubai
Dubai Ports World said it may invest $1 billion in its Indian port project to enable handling of the largest container ships as the company tries to challenge Colombo’s grip on India's maritime trade with Europe and China, reports PTI.
A news report quoting officials in India said DP World spent about Rs13 billion ($288 million) on the first phase of the Vallarpadam facility, which will have an initial capacity of 1 million 20-ft equivalent containers a year.
"What we are trying to do is compete in the regional and international market," Anil Singh, the company's India head, was quoted by Arabian Business as saying.
"It will change the logistic pattern of the country," he said, adding, "The new terminal at Vallarpadam in Kochi, which is due to open in August, will be able to handle the 13,000-container capacity ships commonly used on Asia-to-Europe routes."
Presently, these long-haul vessels are unable to stop in India, which forces the nation's importers and exporters to spend an extra $150 million a year ferrying goods to and from Colombo, Singapore or Dubai, Singh said.
Dubai World is the state-owned holding company that owns 80% of DP World.
According to the official, the remainder of the investment will cover a second phase, which will add another 3 million boxes of capacity within five years, he said.
Container Corporation of India (CCI) Ltd is among the three other partners in the joint venture terminal.
According to the report, DP World will pay for its share of the investment using its own funds.
Kochi aims to lure large container vessels from Colombo, which presently handles as much as 40% of India’s trans-shipment trade, Singh said.
Indian shippers use the Sri Lankan port because of lower costs, deepwater facilities and looser regulations.
DP World already handles almost half of India's annual container volume of 8 million at five ports across the country, he added.
The company, which has spent about Rs80 billion in India, is pursuing further projects and expansion plans in the country, he said.
Worldwide, the port operator runs terminals in 27 countries—from the UK to China—and is building new facilities in four other nations.
It handled 43.3 million containers at 50 ports last year, including at those it operates without ownership.
It hopes that the disclosure norms would improve transparency in functioning of the AMCs and would enable investors to take informed decisions
Market regulator Securities and Exchange Board of India (SEBI) today asked mutual fund (MF) houses to disclose details of investor complaints on their websites, as well as in annual reports, to enable clients to make more informed decisions, reports PTI.
"Mutual Funds shall henceforth disclose on their websites, on the AMFI website as well as in their annual reports, details of investor complaints received by them from all sources," SEBI said in a circular.
Following the circular, all asset management companies (AMCs) will have to put up the data for the bygone fiscal by 30 June 2010 and for each new fiscal within two months of the close of the year.
SEBI hopes that the disclosure norms would improve transparency in functioning of the AMCs and would enable investors to take informed decisions.
In order to increase investor interest in MFs, the market regulator had last year abolished entry load and asked fund houses not to deduct marketing and distribution charges from the investment made by customers.