ONGC Videsh Ltd (OVL), the overseas exploration arm of Oil and Natural Gas Corporation (ONGC), has invoked force majeure clause for its Libyan block following a war-like situation in the African nation.
The block is in Cyrenaica offshore in the Mediterranean Sea. “We have four blocks in Contract Area 43 where we have drilling commitments. However, we had no option but to declare a force majeure in one block after the crisis broke. This will help us to get extra time to fulfill our drilling commitments,” said a senior executive.
Invocation of the force majeure clause allows a contracting party to be exempt from fulfilling its contractual obligations in case of developments beyond their control. These developments usually include natural calamities or political events.
The company had invested approximately $36 million till March 31, 2010. Contract Area 43 was awarded to ONGC Videsh under the licensing round in early 2007. The contract area is spread over an area of 7,449 square kilometre. OVL holds 100 per cent participating interest in the Contract Area with operatorship.
The acquisition of 1011 LKM 2D and 4000 square kilometre 3D seismic data has been completed.
The company had surrendered Libyan block-81-1 in 2010-end since it did not generate a drillable well, the official said. “We paid $4 million to absolve ourselves of our commitments,” he added. The company had invested approximately $26 million till last March.
Last year the company also surrendered Block NC-189 located in west-central part of the Sirte Basin in Libya. OVL had acquired stake in the onland block in June 2003. OVL holds 49 per cent PI in exploration Block NC-189 in Libya with Turkish Petroleum Overseas Company (TPOC), a subsidiary of National Oil Company of Turkey, holding the remaining 51 per cent PI with operatorship. It had drilled three exploratory wells were drilled in this block. OVL’s share of investment was approx $41 million till March 31, 2010.
The first country in West Asia to face upheaval where OVL had a presence was Egypt but there it had already decided to quit even before the crisis hit the country. The company had 70 per cent share in an offshore block North Ramadan (Block 6) in the Gulf of Suez and 33 per cent in North East Mediterranean Deepwater Concession. Shell was their partner in the north east block.
