The Cabinet Committee on Economic Affairs has approved ONGC Videsh Ltd's proposal to invest an additional $1.1 billion in Sakhalin-I oil and gas field project in Russia.
The decision was taken at a meeting of the CCEA on Wednesday, official sources said. OVL has already invested $1.7 billion to acquire a 20 per cent stake in the project.
The investment by OVL, which has 20 per cent stake in the Sakhlain-I project, would be over and above $1.7 billion already approved, Finance Minister P Chidambaram told reporters after the CCEA meeting.
OVL, the overseas arm of state-run Oil and Natural Gas Corp, will raise the additional money from its own resources. The additional amount of $ 1.07 billion would include about $503 million towards carry loan to Russian parties.
Sakhalin-I project will begin natural gas production from the third quarter of 2005. Crude oil production from the offshore fields will also commence from January 2006 with initial production of 50,000 barrels per day.
Crude oil production from the fields will rise to 250,000 barrels by the first quarter of 2007, official sources said. India's share in gas production would be 5-8 million standard cubic metres per day and New Delhi would also be entitled to 20 per cent of the crude oil production.
ExxonMobil is the operator of the project with 30 per cent stake while Sodeco of Japan has 30 per cent interest. The remaining 20 per cent is with Rosneft of Russia.