ONGC Videsh Ltd, the overseas arm of Oil and Natural Gas Corporation (ONGC), plans to invest around $1.5 billion in an Iraq oil block that was awarded to it by the erstwhile Saddam Hussein regime, reports quoting ONGC sources said.

Reports said OVL has concluded service exploration and production contract for Block-8 and is all set to sign the agreement in a few months' time.

OVL is the sole licensee of block 8, a large onshore exploration block in the western desert, spread over an area of 10,500 sq km.

The block, located in the western desert in the Iraq-Saudi Arabia border, was awarded to OVL way back in November 2000. OVL had completed work relating to archival, reprocessing and interpretation of the existing seismic data. But Iraq ordered halt to work in April 2003 due to the then prevailing situation in the country. The contract for the block has since been re-negotiated in line with the provisions of the new oil and gas law.

The block is estimated to hold 54 million barrels of recoverable reserves and an  estimated total of 645 million barrels of in-place reserves. OVL has committed investment of $186 million on exploration in two phases and another $1.5 billion in development of the reserves thereafter.

OVL wants 51 per cent share of the oil and will give out 24 per cent to the partner. The remaining 25 per cent would be with Iraqi national oil company.

As per the terms of the service contract, OVL will get an 18 per cent return on investment, the official said, adding, the state-run explorer was also considering bidding for the six producing oilfields Iraq has put on offer in its first licensing auction.

ONGC as the leading Indian multinational enterprise (MNE), in a list of 24 top Indian corporates, according to a recent survey by the Indian School of Business (Hyderabad) and the Vale Columbia Center on Sustainable International Investment (VCC) at Columbia University in New York.

ONGC is one of the largest overseas investors from India, and accounts for 31 per cent of the foreign assets on the list. It is followed by the Tata Group, with 27 per cent.