Modi launches OVL oil block project in Kazakhstan

PM Modi with Kazakh PM

ENERGY is high on the agenda of Prime Minister Narendra Modi's visit to five Central Asian countries and on July 7 PM Modi and his Kazakhstan counterpart Karim Massimov launched the first exploratory drilling of the Satpayev oil block by India's OVL and KazMunaiGaz.

They launched the drilling through live video conferencing.

ONGC Videsh Ltd. (OVL) -- the overseas wing of state-run ONGC -- had in 2011 picked...

up 25 percent stake in the Satpayev oil block in the North Caspian Sea.

OVL has committed to investing $400 million in exploration in the block.

The PSU major will also pay $80 million to Kazakhstan's KazMunaiGas as a one-time assignment fee.

OVL paid $13 million as a signing amount for a 25 percent stake in Satpayev in 2011.

The Satpayev oil block is an offshore field in the Northern Caspian sea, with potential reserves estimated at 1.8 billion barrels.

India will conduct a feasibility study on importing crude oil and gas from Kazakhstan either through a pipeline or as liquid natural gas in ships. The hydrocarbons can be brought first to Iran via the Caspian Sea and transported across the country through a pipeline.

The opening of the Iran-Turkmenistan-Kazakhstan railway link is also being explored to transport oil and gas to India.

The rail corridor may eventually be linked to the International North-South Transport Corridor (INSTC), which is set to connect Mumbai with St. Petersburg.

The Iran, Turkmenistan and Kazakhstan railway line was inaugurated on December 3 last year and the railway line includes 140 km in Kazakhstan and 85 km in Iran.

OVL is a wholly owned subsidiary of ONGC and is India’s largest international oil and gas E&P company. At present, OVL participates in 32 projects in 16 countries including Azerbaijan, Brazil, Colombia, Cuba, Iraq, Kazakhstan, Libya, Myanmar, Russia, South Sudan, Sudan, Syria, Venezuela and Vietnam. OVL is currently producing 160 thousand barrels of oil and oil equivalent gas per day and has total oil and gas reserves of about 433 mmtoe as on 31 March 2013. OVL has 22 overseas offices, located in HoChi Minh City (Vietnam),Yuzhno Sakhalinsk (Russia), Baghdad (Iraq),Tehran (Iran), Tripoli (Libya), Havana (Cuba), Caracas (Venezuela), Astana & Atyrau (Kazakhstan), Bogota (Colombia), Damascus (Syria), Calgary (Canada) and Baku (Azerbaijan).