ONGC Videsh (OVL) is likely to sign agreement soon for an oil block in Iraq that was awarded to it by the erstwhile Saddam Hussein regime.

OVL has completed the negotiations on the contract for block 8 in Western Dessert of Iraq and the concession agreement is ready for signing. The company will hold 100 per cent interest in the block and will invest $250 million (approx Rs.1,250 crore) in initial exploration phase. The contract will be a service contract wherein OVL will be paid about 18 per cent rate of return on the investment it makes in finding and producing oil from block 8 and OVL will be allowed to take crude oil produced from the block to India as its fee. It will act as the operator of the field until it recoups all its costs and set up a joint operating company with the local operator to take over once development costs have been repaid.

Also See:

OVL consortium likely to begin work on Iran's Farsi offshore block(19-Nov-08)