New Delhi: India has sanctioned funding of $359 million to ONGC Videsh Ltd, overseas arm of ONGC Ltd, for the execution of the first exploration phase in two Nigerian deepwater blocks.
The two blocks, OPL 279 and OPL 285, are being jointly explored by a joint venture company of ONGC Videsh and Lakshmi Mittal`s Mittal Investments Sarl (MIS), known as ONGC Mittal Energy Ltd, incorporated in Cyprus.
The decision comes ahead of Indian Petroleum Minister Murli Deora`s visit to Nigeria later this month.
"The Cabinet Committee on Economic Affairs (CCEA) today authorized OVL to provide funding support to ONGC Mittal Energy Limited (OMEL) for OVL`s share of expenditure of $195 million for Block OPL 279 and $164 million for Block OPL 285 in Nigeria as per work programme and budgeted estimates for the first exploration phase, inclusive of signature bonus and acquisition cost," said a press release issued after the CCEA meeting chaired by the Prime Minister Manmohan Singh Thursday.
For the first exploration phase of five years from 2007 to 2012, the expenditure for OPL 279 and OPL 285, located in Nigeria`s Gulf of Guinea, is estimated to be $389 million and $399 million, respectively.
The funds sanctioned by the Cabinet are for OVL`s share of investment expenditure including payment of Signature Bonus, Work Commitment in first exploration period and acquisition of additional participating interest.
"The investment will give opportunity to ONGC Videsh Limited (OVL) to increase its reserve accretion of hydrocarbons, thereby increasing the energy security of the country. Increased energy security could contribute to better formulation of policy of inclusiveness in the supply chain in the downstream sector," said the press release.