OVL seeks another 2-year extension for exploring Vietnamese oil block in South China Sea

OVL seeks another 2-year extension for exploring Vietnamese oil block in South China Sea

ONGC Videsh Ltd, the overseas arm of Oil and Natural Gas Corp (ONGC), has for the seventh time sought an extension to explore a Vietnamese oil block in the contested waters of the South China Sea.Officials said OVL has applied for a two-year extension to explore Block-128, the licence for which was valid till June 15, 2021.

While India wants to maintain its strategic interest in the South China Sea, Vietnam wants an Indian firm to counter China”s interventions in the contested waters.

OVL had signed a production sharing contract (PSC) with PetroVietnam for deepwater exploratory Block- 128 having an area of 7,058 square kilometers 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.

Officials said the company continues to explore for oil and gas in the block that lies in a water depth of 200-2,000 meters.

No discovery has yet been made on the block, they said.

OVL during the exploration period acquired 3D seismic data, reprocessed 2D seismic data and carried out G&G studies.

But it is yet to drill the one well it had committed as part of the minimum work programme, they said adding further G&G studies are being carried out.

Vietnam on October 29, 2019, had granted a two-year extension from June 16, 2019 to June 15, 2021 and a request for a further two years of extension of Exploration Phase-1 of the PSC was made on March 12 this year.

“We are hoping they will agree to extend the PSC till June 15, 2023,” an official said adding the Vietnamese national oil company PetroVietnam has agreed to share some of the technical data pertaining to the nearby area of Block 128 for Petroleum System Modelling and other related studies for better geological understanding.

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 said.

The company has not found any hydrocarbon in the block but is continuing to stay invested to maintain India”s strategic interest.

OVL first took a two-year extension of the exploration period till June 2014 and then another 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.

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 1.330 million tonnes during 2020-21 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 Block 128 for global bidding.

China claims sovereignty over most of the South China Sea where the two blocks are located and had warned the Indian arm from drilling in the region.

Source link

Add a Comment

Your email address will not be published.