OVL buys 30% stake in Cuban blocks

ONGC Videsh Ltd (OVL) is set to make a foray into the Cuban oil and gas industry by acquiring 30 per cent participating interest in seven deep-water exploration blocks in that country. The acquisition will be completed after the Cuban government formalises the contract.

The company has signed an agreement with Repsol-YPF of Spain to acquire the stake in blocks 25, 26, 27, 28, 29, 36 and part of block 35 in Cuba.

Repsol-YPF holds another 40 per cent in these blocks with Norsk Hydro of Norway holding the remaining 30 per cent. Repsol-YPF operates the blocks.

The blocks are spread over an area of nearly 12,000 sq km in the exclusive economic zone. The hydrocarbon resource potential is estimated to be more than of 4 billion barrels.

According to an ONGC statement, drilling in an exploratory well in one of these blocks indicated the presence of hydrocarbons. These blocks are in the third exploration stage.

Work programme during this period includes acquisition of 3,000 sq km, 3-D seismic data. Drilling wells on selected prospects will be decided in the next exploration phase.

"With proven presence of petroleum system in exclusive economic zone, the area has drawn attention of many international oil companies. The blocks have a good potential and are especially significant for OVL because the acquisition will open the doors to other opportunities in the Latin American hydrocarbon sector" said Subir Raha, chairman, OVL, in a statement.