Oil and Natural Gas Corporation has asked the government to enhance the financial powers of its foreign investment arm, ONGC Videsh Ltd, to $100 million from about $45 million to counter the challenge from Chinese and Malaysian firms in acquiring oil properties abroad.

At present, OVL can invest upto Rs 200 crore (Rs 2 billion) in oil and gas field acquisition abroad without having to take government approval.

"The present limit of Rs 200 crore was fixed in 1996 when the exchange rate was 34 rupees to a dollar. The rupee has since depreciated to 47 to a dollar. Together with annual international inflation rate of 2.5-3 per cent, the financial power has eroded to roughly half," senior officials said in New Delhi.

The company is also seeking the financial limit to be fixed in dollars terms. Unlike the present sanction, a dollar denominated financial empowerment would insulate the firm's investment strength against any currency fluctuations.

Sources said ONGC's plea to the oil ministry has found favour with Petroleum Minister Ram Naik, who felt the request was justified considering the time lost in getting government approvals every time a bid for acquisition of projects over Rs 200 crore was made.

"Overseas bidding is very aggressive these days and if the company is made to go to the government every time it improves or modifies the bid (in order to secure a project), the prospects may well be lost to the Chinese or Malaysians," they said, adding the oil ministry is drawing a Cabinet note for enhancement of the financial powers.