OVL Wants Greater Stake in Venezuelan Field

ONGC Videsh (OVL), the overseas investment arm of petroleum exploration major Oil and Natural Gas Corporation (ONGC), wants the Venezuelan government to raise OVL's stake in the San Cristobal field to 49 percent.

Venezuela, through its national oil company Petroleos de Venezuela (PDVSA), has offered OVL a 30-percent stake in the onshore field.

India's Minister for Petroleum, Murli Deora, has sent a letter to Venezuela's Minister of Energy and Petroleum and PDVSA's President, Rafael Ramirez Carreno, to "reconsider the decision and offer a participating interest of up to 49 percent, instead of 30 percent."

In the letter, Deora has said the 49-percent stake would be "befitting the growing cooperation" between the two countries. He said that after the visit of the Venezuelan President Hugo Chavez to India in March 2005, OVL was given an assurance that it would be offered a 49-percent stake in San Cristobal.

However, in January of this year, PDVSA Vice-President Luis P Vierma told reporters in New Delhi that OVL would be offered a 30-percent stake in the field. The decreased participating interest has turned out to be a sore point.

Meanwhile, Venezuela has also invited ONGC to participate in quantification and certification of reservoirs for the Junin block in the Orinoco belt.

Venezuela is the world's fifth-largest crude oil producer. PDVSA is also the fifth-largest crude oil producing company in the world and the fourth-largest refiner.

In March 2005, India and Venezuela signed an umbrella agreement for cooperation in the hydrocarbon sector. The onshore San Cristobal oilfield has the potential to produce 100,000 barrels of oil a day.

Experts believe that accelerating development of the petroleum sector could make Venezuela Latin America's wealthiest country within the next decade. Much of this development is expected to come through foreign commercial ties.