|OVL MD DK Sarraf|
For the other block OVL and OIL will have to spend $85 million and conduct at least 2,850 km-long 2D seismic survey, 300 sq km 3D and drill three wells during the contract period, of which five years will be treated as initial period and the three years for subsequent exploration. The contractors will be allowed to operate and sell oil and gas for 20 years from an oil field and 25 years from a gas field. Wellhead gas prices in Bangladesh are pegged to high sulphur fuel oil (HSFO) prices in the international market, while oil prices are determined on the basis of a 'fair market value'. Under the contract the floor price for HSFO has been fixed at $100 per tonne and the ceiling price at $200/tonne. As per the PSC, OVL will have rights of full repatriation of profits without any signature bonus or royalty and need not to pay duty for equipment and machinery imported for operations during the exploration, development and production phases and will have 100 per cent cost recovery and production bonuses. The ONGC and OIL could also sell gas independently to third parties instead of going through Petrobangla and companies will be allowed to market the gas domestically as well, but Petrobangla will have the first right of refusal.ONGC Videsh Ltd, a Miniratna CPSE under ministry of petroleum & natural gas is the wholly owned subsidiary and overseas arm of Oil and Natural Gas Corporation Limited (ONGC). OVL owns participating Interests in 32 oil and gas assets in 16 countries and contributes to 12 percent and seven percent of oil and natural gas production of India respectively. In terms of reserves and production, OVL is the second largest petroleum Company of India, next only to its parent ONGC.