India’s leading foreign firm ONGC Videsh Ltd has got the seventh extension for oil and gas exploration in a Vietnamese block in disputed waters of the South China Sea, officials said.
He said OVL, the overseas arm of state-owned Oil and Natural Gas Corporation (ONGC), has secured an extension of the exploration phase till June 15, 2023.
The company has not found any commercially recoverable oil and gas reserves in the block in 16 years, but has continued its presence there because of India’s strategic interest in the South China Sea.
Vietnam also wants the Indian firm to counter China’s interference in the disputed waters.
OVL signed a production sharing contract (PSC) in May 2006 with Vietnam’s national oil firm PetroVietnam for deepwater exploration Block-128 with an area of 7,058 square kilometers in Vietnam’s offshore Fukhan Basin, Vietnam. It was issued an investment license on 16 June. 2006, thereby giving effect to PSC.
The firm has fulfilled the license requirement for the shooting of 3D seismic data and reprocessing of 2D seismic data as well as drilling of a committed well.
Officials said that PetroVietnam has agreed to share some technical data related to the area near the block for petroleum system modeling and other related studies for better geological understanding.
The firm has acquired the data and is now modeling petroleum systems to reduce exploration risk and review the block’s prospects.
OVL first took a two-year extension of the exploration period till June 2014 and then another one year. A third extension was given on 28 May 2015 and a fourth in 2016. It got the fifth extension for two years in 2017 and the sixth extension from June 16, 2019, to June 15, 2021.
Another official said the company had dug a well on the block a few years back, but it could not reach the target depth and hence it will have to dig the well again.
“If we don’t drill, we are liable to pay the penalty,” he said.
the company has not found any hydrocarbons in the bloc but has continued to remain invested in maintaining India’s strategic interest.
The block is located in the part of the South China Sea over which China claims its sovereignty. In 2011, Beijing warned OVL that its exploration activities off the Vietnam coast were illegal and violated China’s sovereignty, but the company continued to explore oil and gas.
OVL entered Vietnam In early 1988 when it obtained the exploration license for Block 6.1.
OVL holds 45 per cent stake in block 6.01 and its share in condensate and oil equivalent gas production from the block was 0.919 million tonnes during the 2021-22 financial year.
The 955 sq km block 06.1, located in the Nam Kon Son Basin, has two productive areas – Lan Te and Lan Rosneft – and holds 35 per cent while PetroVietnam holds the remaining 20 per cent.
In 2006 the firm got two exploration blocks – Block 127 and Block 128. While block 127 was abandoned due to poor prospects, the other block was retained.
The first expansion followed for Block 128. China Placing the area under the block for global bidding.
This story has been published without modification in text from a wire agency feed.
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