New Delhi, Nov 21: State-run Oil and Natural Gas Corp has asked government to enhance the financial powers of its foreign investment arm, ONGC Videsh, to $100 million from about $45 million (Rs 200 crore) to counter challenge from Chinese and Malaysian firms in acquiring oil properties abroad. At present, OVL can invest up to Rs 200 crore in oil and gas field acquisition abroad without having to take government approval.

"The present limit of Rs 200 crore was fixed in 1996 when the exchange rate was Rs 34 to a dollar. The rupee has since depreciated to 47 to a dollar. Together with annual international inflation rate of 2.5-3 per cent, the financial power has eroded to roughly half," senior officials said.
The company is also seeking the financial limit to be fixed in dollars terms. Unlike the present sanction, a dollar denominated financial empowerment would insulate the firm's investment strength against any currency fluctuations.
Sources said ONGC's plea to the Oil Ministry has found favour with Petroleum Minister Ram Naik who felt the request was justified considering the time lost in getting government approvals everytime a bid for acquisition of projects over Rs 200 crore was made. Bureau Report