OVL miffed at Kazakh firm's demand

ONGC Videsh (OVL)  is miffed by the demand for a fee by Kazakh national oil and gas firm Kazmunaigaz (KMG), to hold further discussions on OVL efforts to take a 50% stake in the prospective Satpayev block in the Caspian Sea, Kazakhstan.

The Kazakh government had last year offered 50% stake to OVL, in either Satpayev or Makhambet blocks in the Caspian Sea. OVL evinced interest in the Satpayev block.

Now, OVL is being asked to pay a fee for "further talks" with KMG on joint exploration and development of Satpayev block. OVL has already spent a "considerable amount" in geological studies leading to identification of prospects and has refused to accept the KMG demand, company sources said.

KMG was also asking OVL to pay an additional bonus at the exploration stage. OVL says it is willing to pay a signature bonus after the participating interest is assigned, but will not shell out any additional bonus at the exploration stage as it is meeting the entire exploration expenditure.

Sources said there were differences between the two on the equity stake in the block. When the two signed an MoU last February, OVL expected to get equal interest in the block.

OVL is also opposed to KMG becoming a joint operator during the exploration stage. It wants exclusive operatorship with KMG joining during the development phase.