THE overseas arm of state-run explorer Oil and Natural Gas Corp (ONGC) ONGC Videsh Ltd has inked a Letter of Intent (LoI) to expand its oil and gas exploration in offshore Vietnam. The LoI was signed during the President Pranab Mukherjee's just concluded trip to the Southeast Asian country.
OVL will consider exploring in two to three blocks out of the 5 areas in South China Sea that Vietnam...had offered on nomination basis in November last year.
The five blocks or areas - 17, 41, 43, 10&11-1 and 102&106/10, offered in November last year lie outside the territory claimed by China in the South China Sea.
"OVL and PetroVietnam, the major oil producing state-owned company of Vietnam, signed a Letter of Intent (LOI) on September 15 to participate in the exploration of oil and gas in offshore Vietnam," the company said in a statement.
The LoI was signed by OVL managing director Narendra K Verma and PetroVietnam president and CEO Do Van Hau in Hanoi.
Oil Minister Dharmendra Pradhan was also present at the signing.
"The LoI provides for expansion of exploration activities by OVL in Vietnam by considering participation in 2-3 additional blocks subject to technical and commercial viability and requisite approvals," it said.
In return, PetroVietnam may consider participation in some of the exploration blocks of OVL on mutually agreeable terms subject to due-diligence.
OVL forayed into Vietnam as early as 1988, when it bagged the exploration license for Block 06.1. The company got two exploration blocks - Block 127 and Block 128, in 2006.
However, Block 127 was relinquished after completing the work programme, and the other Block 128 is currently under exploration.
Additionally, ONGC Videsh and PetroVietnam have been engaged in further discussions for possible expansion of cooperation in hydrocarbon sector of Vietnam, the statement said.
OVL had relinquished Block 127 in offshore Phu Khanh Basin after it failed to find any oil or gas in the area.
Though it had decided to withdraw from adjacent Block 128, it has decided to stay put because of India's strategic interests in the region. The exploration period for the block has been extended until June 15, 2015.
China claims sovereignty over most of the South China Sea where Block 127 and 128 are located and had warned the Indian arm from drilling in the region.
OVL continues to own 45 per cent in Vietnam's offshore block 6.1 and its share of production was 2.023 billion cubic metres of gas and 0.036 million tonnes of condensate.ONGC Videsh is a wholly-owned subsidiary of ONGC and is India’s largest international oil and gas E&P company. At present, ONGC Videsh has participation in 35 projects in 16 countries including Vietnam, Azerbaijan, Bangladesh, Brazil, Colombia, Iraq, Kazakhstan, Libya, Mozambique, Myanmar, Russia, South Sudan, Sudan, Syria and Venezuela. ONGC Videsh is currently producing about 160 thousand barrels of oil and oil equivalent gas per day and has total oil and gas reserves of 637 mmtoe as on March 31, 2014.