March 30, 2005
India's energy quest in Latin America

(The Hindu) - "Venezuela's President, Hugo Chávez, during his visit to India in the first week of March offered oil fields to ONGC Videsh Ltd. (OVL) and also expressed interest in the long-term supply of oil to India's large and growing market. President Chávez's offer is part of his own strategic policy of diversification of markets for Venezuelan oil (...).

Venezuela is planning to increase its production to 4 million barrels a day from 3 million now and is looking for new customers for this extra production. It is the world's fifth largest oil exporter and has the largest reserves of oil (77 billion barrels) and gas (458 trillion cubic feet) in the western hemisphere.

Besides the regular oil, it has 230 billion barrels of reserves of extra heavy crude in the 'Orinoco belt' from which it has started producing about 400,000 barrels of regular oil through new technology for upgradation. With this, the total oil reserves go up to 300 billion barrels and Venezuela becomes even more important in the global scenario.

The entry of OVL in the rich Venezuelan market is, therefore, an important breakthrough. This will also help India learn the technology for upgrading extra-heavy crude, which has been found by Oil India Ltd. in Rajasthan. Besides Venezuela, other countries in the region such as Mexico, Ecuador, Colombia, Argentina, Trinidad and Tobago, Cuba, and Suriname offer opportunities, in varying degrees, for acquisition of oil and gas assets by India"