ONGC Videsh in joint development pact with PDVSA for Venezuelan oil field

09 April 2008

ONGC Videsh Limited (OVL) has signed a joint venture agreement with Venezuela's state owned oil firm Petroleos De Venezuela S A (PDVSA) to jointly develop a Venezuelan oil field. This follows the Indian government's recent approval of OVL's participation in the project at an investment of $356 million.

Under the agreement, OVL will have a participating interest of 40 per cent,  in the San Cristobal Field in Junin, Orinoco Region of Venezuela for a total investment of $355.7 million dollars comprising sign-on bonus of $173. million. The two companies will jointly develop the field from its current production level of 20,000 bbl per day to 40,000 bbl per day.

Besides, ONGC would also be required to sanction a loan of $355.74 million for the project that covers 160.16 square kilometers and is located in Junin in the Orinoco heavy oil belt of Venezuela, which is in one of the largest known accumulations of heavy oil in the world, covering an area of about 54,000 square km..

The production from San Cristobal field started in October, 1981. Till date 44 wells have been drilled, of which 24 are active. The field currently  produces about 24,000 barrels of oil per day. Ultimate recoverable reserves in the project area have been estimated by a joint team of ONGC and PDVSA at 232.38 million barrels that can yield up to 100,000 barrels of oil per day.

This joint venture will also explore the potential of hydrocarbons exploration in the unexplored area of the project and using enhanced oil recovery (EOR) techniques to improve oil recovery rate in the field, which ONGC has commercialised in its western fields in India.

Venezuela is among the largest oil producers in the world, with about 87 billion barrels of proven conventional oil reserves (OPEC 2006). In addition, it has a huge non-conventional oil deposits (heavy oil), most of which are located in the Orinoco oil belt.