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India and Vietnam stepped up cooperation in the energy sector with ONGC Videsh and PetroVietnam Exploration Production Corporation signing an agreement for exploring three oil blocks, in the shadow of Chinese objections.
ONGC Videsh Ltd is the overseas subsidiary of India’s state-run ONGC. All the oil blocks are off the shore of Vietnam. Two of these — 102/10 and 106/10 — are held by PVEP while the third block — 128 — is held by OVL.
China has cast the shadow of objection over the agreements signed in the presence of Prime Minister Narendra Modi and his Vietnam counterpart Nguyen Tan Dung, at present visiting India. China has repeated made it clear that it is not happy with India exploring projects in the South China Sea, a major source of hydrocarbons.
The first two blocks, however, lie outside the sea territory claimed by China. They are among the five blocks offered by PVEP in November last year. OVL had earlier decided to return block 128 as exploration found to be commercially not viable. OVL will take 40 per cent stake in Block 102/10 and 50 per cent in 106/10. PVEP, the national oil company of Vietnam, will take half of OVL’s 100 per cent stake in Block 128.
ONGC and PVEP also signed a Memorandum of Understanding for exploring the New Exploration Licensing Policy blocks in the Andamans and Cauvery basins. During President Pranab Mukerjee’s visit to Vietnam last month, a letter of intent had been signed by OVL and PVEP. China had issued a statement claiming that it would not “support any agreement” that dealt with any “waters administered by China, or is not approved by China”.
