Tue, Dec 6, 2016 | updated 11:17 AM IST

ONGC Videsh, PDVSA sign agreement for payment of dividend and financing of San Cristobal project

Updated: Nov 10, 2016 19:06 IST

New Delhi [India], Nov.10 (ANI): ONGC Videsh Limited (ONGC Videsh) and Petroleos De Venezuela S.A. (PDVSA) through their relevant subsidiaries signed two definitive agreements for facilitating redevelopment of the San Cristobal joint venture project in Venezuela on November 4.

The agreements were signed by ONGC Videsh CEO Narendra K Verma and Venezuela's Petroleum Minister and President PDVSA, Mr Eulogio Del Pino, in the presence of President Nicolas Maduro.

The San Cristobal project (Project) is located in the Zuata Subdivision of proliferous Hugo Chavez Fria Orinoco heavy oil belt, in the Junin Norte Block in eastern Venezuela.

The joint venture was incorporated in April 2008 consequent to a Memorandum of Understanding (MOU) signed in March 2005 at New Delhi to jointly develop Oil and Gas Exploration and Production Projects in Venezuela.

ONGC Videsh has an equity interest of 40 percent in the Project with PDVSA holding the balance 60 percent.

The agreements provide for mechanism to liquidate ONGC Videsh's outstanding dividends from the project while at the same time, ONGC Videsh needs to obtain long term financing for the capital investments for implementing the remediation plan of the project.

The remediation plan aims to invigorate the field from its current production level of about 18,000 bbl/day to 27,000 bbl/day by the use of water flooding technique.

Earlier on August 1, 2015, ONGC Videsh and PDVSA had entered into a Memorandum of Cooperation on Training and Education under which ONGC Videsh has sponsored training for a batch of petroleum engineers from PDVSA in masters programs at the premier petroleum institute of India - Indian School of Mines, Dhanbad. The petroleum engineers upon completion of their specialized course shall be posted in the joint ventures of ONGC Videsh with PDVSA.

The ONGC alliance with PDVSA in the upstream sector is strategic in nature and will continue to build and grow with strong cooperation, in order to achieve corporate goals. (ANI)