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India’s flagship overseas firm ONGC Videsh Ltd (OVL) has secured another three-year extension to explore oil and gas in a Vietnamese block in the contested waters of the South China Sea, the firm’s parent ONGC said.
This is the eighth extension for OVL, the overseas arm of state-owned Oil and Natural Gas Corporation (ONGC). The seventh extension to explore oil and gas was till June 15, 2023 and PTI on August 13 reported that the company was in talks with Vietnamese authorities for another three-year extension.
OVL “secures extension of 3 more years to explore in South China Sea’s Block 128! India’s strategic commitment stays strong as ONGC Videsh continues its exploration journey with its 8th extension till 15 June 2026,” ONGC said in a post on social messaging platform X, formerly known as Twitter.
The firm had in a proposal to regulator PVN sought a three-year extension of the exploration phase-1.
“We are embracing challenges, safeguarding interests & fostering partnerships,” ONGC said.
The company has so far not found any commercially recoverable oil and gas reserves in the block in the 17 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 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 OVL acquired 3D seismic data and reprocessed 2D seismic data to fulfil a part of the minimum work programme of the phase-1 of exploration period.
Also, petroleum system modelling studies have been carried out based on data provided by PetroVietnam. 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.
The seventh extension of two years was till June 15, 2023. 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.
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 oil and gas.
OVL made a foray into Vietnam as early as 1988 when it bagged the exploration licence for Block 06.1. OVL owns a 45 per cent stake in Block 06.1 and its share of condensate and oil equivalent gas production from the block was 0.693 million tonne during the 2022-23 fiscal.
The production sharing contract (PSC) for Block 06.1 ws till May 18, 2023 but the Vietnam government has extended it for another 16 years.
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.)
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