OVL acquires Africa block pie

ONGC Videsh Ltd (OVL) has reached an agreement with Vanco Energy Company of the US to acquire 30 per cent participating interest in an exploratory block at Ivory Coast in West Coast Africa.

The acquisition will be completed after approval by the government of Ivory Coast. OVL had negotiated acquisition of 40 per cent stake in Block CI-112.

It has offered 10 per cent participating interest to Oil India Ltd retaining 30 per cent with itself. The agreements were signed on Wednesday, the company said in a release.

The acquisition marks OVL's first foray into West Coast Africa. The block is spread over an area of 4156 square kilometers in San Pedro basin. The hydrocarbon resource potential in the block is estimated to be in excess of one billion barrels.

"Block CI-112 has a good potential. This acquisition is especially significant as OVL's entry in the West African Hydrocarbon Sector. OVL is now present in ten countries." Subir Raha, Chairman OVL said in the release.

The block will be in its second exploration period upto 20 April 2005. During this period, work commitment of one exploratory well is to be completed.

OVL and OIL shall bear 39 per cent and 13 per cent exploratory costs respectively, against their participating interests of 30 per cent and 10 per cent respectively, in the cost incurred during exploratory phase. In the event of successful discovery, both OVL and OIL will have recovery rights.