ONGC Videsh, the overseas unit of Oil & Natural Gas Corp. (500312.BY), is likely to sign an agreement for an oil block awarded to it by the former regime of Saddam Hussein in Iraq in the next two months, the Business Standard reported Wednesday, citing unnamed sources.
"Negotiations on the contract for Block 8 in the Western Desert have been concluded, and the concession agreement is ready for signing," a source said in the report.
"It'll be a service contract wherein OVL will be paid about an 18% rate of return on the investment it makes in finding and producing oil from Block 8," the source added.
OVL, which had been awarded the block in 2000, will hold 100% in the block and invest $250 million in the initial exploration phase, the report said.