With domestic oil and coal production stagnant,India has intensified its quest for energy resources overseas,a trend that would further buttress outward FDI flows and strain its capital account. While Indias coal imports are set to rise steeply,a consortium of state-owned firms led by ONGC Videsh (OVL) the overseas arm of ONGC on Wednesday reiterated its commitment to increase investments in a couple of heavy oil projects in Venezuela from $350 million to $3 billion.
The Latin American nation holds the largest reserves of light and heavy crude oil in the western hemisphere. Minister of state for commerce Jyotiraditya Scindia said in Venezuela that this would be one of the biggest overseas investments for Indias state-owned firms and help them get access to energy assets in Venezuela.
As per the plan,OVL will invest an additional $2.2 billion in the Carabobo-1 heavy oil project,where parent ONGC already holds an 11 per cent stake,while IOC and Oil India hold 3.5 per cent stakes each. This oilfield is expected to produce 4,00,000 barrels a day of heavy oil.
In parallel,OVL would also invest $500 million in the San Cristobal oilfield,where it holds a 40 per cent stake through a $350-million earlier investment.
OVL has already developed a creditable asset base that comprises producing,discovered and exploration fields across the continents. It has operator status in eight projects and joint-operator status in another seven. Other Indian public sector units like GAIL and BPCL is also keen on exploring opportunities in Venezuela for marketing and enhance trade between the countries.