The government may tomorrow give nod to Oil and Natural Gas Corp and partners to invest about USD 2.2 billion in developing a giant oil field in Venezuela.

The Cabinet Committee on Economic Affairs (CCEA) may tomorrow consider giving ONGC Videsh Ltd, the overseas arm of the state-owned firm, approval to invest USD 1.33 billion and permitting Indian Oil Corp (IOC) and Oil India Ltd (OIL) to spend USD 424 million each in the Carabobo-1 project.

Official sources said the Carabobo-1 project of the Orinoco extra-heavy oil belt of Venezuela would involve a total investment of close to USD 21 billion over 25 years.

The three firms have for the time being sought the government's approval for investing USD 2.2 billion and 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 month, 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 the 'Mixed Company' that will develop 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 tonnes of crude oil annually out of the envisaged output of 400,000 barrels a day.

Sources said OVL's investment of USD 1.33 billion from 2010 to 2015 is made up of USD 302 million in equity, USD 289 million in loan of PdV, USD 454 million as its contribution to Mixed Company as debt and USD 289 million as signature bonus.

IOC and OIL's exposure of USD 424 million each is made up of USD 96 million in equity contribution, USD 92 million in loan to PdV, USD 144 million as contribution to Mixed Company by way of debt and USD 92 million as signature bonus.

The Carabobo-1 project, comprising Carabobo-1 Central and Carabobo-1 North blocks, would develop extra-heavy crude production capacity of up to 400,000 barrels per day (20 million tonnes a year). Early output of at least 50,000 bpd is slated to start in 2012-13, rising to peak in 2016.

The project investment of USD 21 billion includes USD 12.8 billion cost of constructing a heavy crude upgrader that can turn Orinoco's tar-like oil into valuable synthetic crude. The 200,000-bpd upgrader may be built at Soledad in Anzoategui state to make synthetic crude of 32 degree API or higher by 2015-16.

Since signature bonus is to be paid by only foreign firms, the share of OVL, IOC and OIL would be USD 472.5 million or 45 per cent of USD 1.05 billion. They will also contribute a similar amount to PdV as their share of credit.