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ONGC is leading a consortium of Indian oil firms to bid for a minority stake in an oil block at Venezuela. The consortium includes Reliance Industries besides IOC and Oil India Ltd. Though the equity valuation for the oil block is not clear at present, according to a Dow Jones report

the block would entail development cost of $16-18 billion and could go even higher making it one of the biggest overseas investment projects for an Indian firm or a group of firms.

The oil block is one of seven such blocks in the Orinoco belt that Venezuela is offering to foreign investors. According to the Venezuelan government, the area contains 272 billion barrels of recoverable reserves. The ONGC-led consortium is studying three blocks and may ship the Venezuelan crude back to India to be processed at local refineries.

Although ONGC has been very aggressive in scouting for overseas energy assets through its international arm ONGC Videsh Ltd(OVL), the magnitude of development cost is said to be the reason why ONGC is taking the consortium route to bid for the block.

The consortium is eyeing 40% stake together in the block. ONGC and Reliance will be the two key shareholders having around 15-20% stake each while IOC is seeking 2.5-5% stake and OIL could get a 2.5% in the deal.

Others who are in the fray for the Venezuela blocks include two Chinese firms China National Petroleum Corp and Sinopec Group.

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