Oil and Natural Gas Corp (ONGC) and partners Indian Oil Corp (IOC) and Oil

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India Ltd (OIL) will invest around USD 2.25 billion initially, in development of a giant oil project they bagged in Venezuela last week.

The Carabobo-1 project of the Orinoco extra-heavy oil belt of Venezuela would involve a total investment of USD 19 billion over 25 years. The three firms have for the time being sought government nod for investing USD 2.25 billion.

Official sources said, ONGC Videsh Ltd, the overseas arm of state explorer, IOC and OIL may be able to fund most of the future investment from the revenues they will start earning when the project goes on stream in three years.

Last week, the three won rights to develop Carabobo-1 project along with Spain's Repsol-YPF and Petronas of Malaysia after committing a signing amount of USD 1.05 billion and an equivalent to Venezuela's state-run PdV in loan.

Repsol-YPF, OVL and Petronas will each hold 11 per cent stake in Carabobo-1, with 7 per cent being split between IOC and OIL. Balance 60 per cent will be with PdV.

The project will give India 3.6 million tons of crude oil annually out of the envisaged output of 400,000 barrels a day.

Sources said the USD 2.25 billion investment would cover OVL-IOC-OIL's share of USD 472.5 million in the signature bonus as also their initial instalments of the loan to PdV and capital expenditure in the project.

The entire signature bonus is to be borne by Repsol, Petronas and the three Indian firms in proportion to their shareholding.