OVL will make a total investment of $355.738 million comprising signature bonus of $173.1 million for the stake, a company official said. Venezuelan national oil company Petroleos de Venezuela (PDVSA) will hold the remaining 60 per cent through a subsidiary.

Besides, ONGC would also be required to sanction a loan of $355.74 million for the project that covers 160.16 square kilometers located in the Orinoco Heavy Oil belt.

The production from San Cristobal field was started in October, 1981. Till date 44 wells have been drilled, of which 24 are active. The field is currently producing about 24,000 barrels of oil per day.

Ultimate recoverable reserves in the project area have been estimated by a joint team of ONGC and PDVSA at 232.38 million barrels that can yield up to 100,000 barrels of oil per day.

"OVL and the the PDVSA subsidiary will form a joint venture company to operate the San Cristobal project," the official said. The Indian firm will have two directors on the board of the joint venture company, while PDVSA subsidiary would have three directors including the chairman.

Capital expenditure as per the business plan mutually agreed by OVL and PDVSA would be $446.13 million. Venezuela, the only OPEC member from Latin America, is one of the top four oil producing countries in the world. It has 87.04 billion barrels of proven oil reserves, largest in the western hemisphere.