 "Crude oil, OVL, ONGC Videsh")
India's flagship overseas firm ONGC Videsh Ltd has got the seventh extension to explore for oil and gas in a Vietnamese block in the contested waters of the South China Sea, officials said.
OVL, the overseas arm of state-owned Oil and Natural Gas Corporation (ONGC), has secured extension of the exploration phase upto June 15, 2023, they said.
The company has not found any commercially recoverable oil and gas reserves in the block in the 16 years it has been exploring there but has continued presence there because of India's strategic interest in the South China Sea.
Vietnam too wants the Indian firm to counter China's interventions in the contested waters.
OVL had signed a production sharing contract (PSC) with Vietnam's national oil firm PetroVietnam for deepwater exploratory Block- 128 having an area of 7,058 square kilometres in Offshore PhuKhanh Basin, Vietnam in May 2006. An investment licence was issued to it on June 16, 2006, thereby giving effect to the PSC.
The firm has completed the licence requirement of shooting 3D seismic data and reprocessing of 2D seismic data as well as drilling of the committed one well.
Officials said PetroVietnam has agreed to share some of the technical data pertaining to the nearby area of the block for petroleum system modelling and other related studies for better geological understanding.
The firm has received the data and is now carrying out petroleum system modelling to mitigate the exploration risk and review the prospectivity of the block.
OVL first took a two-year extension of the exploration period till June 2014 and then another for one year. A third extension was granted on May 28, 2015, and a fourth in 2016. It got the fifth extension for two years in 2017 and a sixth from June 16, 2019 to June 15, 2021.
Another official said the company had a couple of years ago drilled a well on the block but it could not reach the target depth and so it now has to drill the well all over again.
"If we don't drill, we are liable to pay penalties," he added.
The company has not found any hydrocarbon in the block but is continuing to stay invested to maintain India's strategic interest.
The block lies in the part of the South China Sea over which China claims sovereignty. In 2011, Beijing had warned OVL that its exploration activities off the Vietnam coast were illegal and violated China's sovereignty, but the company continued exploring for oil and gas.
OVL made a foray into Vietnam as early as 1988 when it bagged the exploration licence for Block 6.1. OVL owns a 45 per cent stake in Block 6.01 and its share of condensate and oil equivalent gas production from the block was 0.919 million tonnes during 2021-22 fiscal.
The 955 sq km Block 06.1 located in Nam Con Son basin has two producing fields -- Lan Tay and Lan Rosneft -- and has a 35 per cent stake while the remaining 20 per cent is with PetroVietnam.
The firm in 2006 got two exploration blocks -- Block 127 and Block 128. While Block 127 was relinquished due to poor prospects, the other block was retained.
The first extension for Block 128 followed China putting the area under the block for global bidding.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
