26-06-08 ONGC Videsh Ltd (OVL), the overseas investment arm of ONGC, has got the Cabinet Committee on Economic Affairs (CCEA) nod for investing $ 437 mm in exploratory blocks in Trinidad and Tobago, and Brazil.
OVL will invest $ 155 mm in a gas block in Trinidad and Tobago and another $ 282 mm in two exploration blocks in Brazil.

Mittal venture
ONGC Mittal Energy Ltd (OMEL) -- a joint venture between OVL and the LN Mittal Group -- had won the NCMA-2 offshore block in Trinidad and Tobago.
After the CCEA meeting, the Minister of State in Prime Minister’s Office, Mr Prithviraj Chavan, said “OVL has been authorised to invest $ 155 mm in the first exploration phase of block NCMA-2 in offshore Trinidad and Tobago with IRR (internal rate of return) of more than 14 %.”

CCEA has authorised the Empowered Committee of Secretaries to allow OVL to farm out a suitable share in the block for sharing risk and leveraging experience in the region to an experienced player, should the same be considered appropriate by the OVL Board or OMEL as the case may be.
Mr Chavan said OVL has also been authorised to invest $ 137 mm in block SM-1413 and $ 145 mm in block ES-470 (total $ 282 mm), respectively, in the first exploration phase of these offshore blocks in Brazil with IRR more than 16 %. CCEA has allowed OVL to partner any regional player for sharing risk and leveraging experience in the exploration of these blocks.

Further, it has authorised the Ministry of Petroleum and Natural Gas to give specific approval to ONGC for providing funding and guarantee support, in excess of 30 % of ONGC’s net worth, in all the three blocks, subject to the requirements by OVL without seeking budgetary support from the Government.
It has also authorised the Empowered Committee of Secretaries to approve an additional investment of up to 30 % by OVL in these blocks in case of cost escalation in the future.