Naik said the government has cleared the proposal, but declined to divulge details.
A Petroleum Ministry source said ONGC Videsh will buy an 11% stake each in block 3 and block 7 from two Middle East-based companies for a total of $125.4 million.
The Petroleum Ministry source said the two blocks are expected to yield around 774 million barrels of commercially recoverable crude.
Commercial production on the blocks is expected to begin in 2007, the source said, adding the output from the blocks is initially expected to be around 8.5 million metric tons a year. Output may increase to around 10 million tons a year from 2008, out of which ONGC Videsh may get around 1 million tons as part of its share in the oil blocks.
ONGC Videsh already has a presence in Sudan. It recently bought a 25% stake in the Greater Nile petroleum exploration project in Sudan. It also has a stake in the oil exploration blocks 5A and 5B adjacent to the Greater Nile project.
Besides Sudan, ONGC Videsh has acquired stakes in upstream ventures in Iraq, Russia, Vietnam, Iran, Syria and Libya to supplement domestically produced oil and gas.
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