OVL gets one year extension for Vietnam block

STATE-owned Oil and Natural Gas Corp (ONGC) has received a one-year extension to explore in a Vietnam oil block in the controversial waters of the South China Sea.
Earlier in May ONGC had applied to the Vietnamese authorities for a third extension of the exploration licence for deep-sea Block 128.
ONGC in a filing said its overseas investment arm, ONGC Videsh Ltd (OVL) had applied...
for extension of block to PetroVietnam, Vietnam’s national oil company, on May 28, 2015.
“In response of ONGC Videsh request, PetroVietnam has granted extension of the block up to June 15, 2016,” the regulatory filing noted. OVL had signed Production Sharing Contract (PSC) for the 7,058 sq km Block 128 in offshore PhuKhanh Basin, Vietnam on May 24, 2006.
Ministry of Planning & Investment (MPI), Vietnam issued investment licence for the Block on June 16, 2006, being effective date of the PSC.
The company has not found any hydrocarbon in the block but is continuing to stay invested.
ONGC described the extension as “routine” saying such an exercise is carried out in all the exploration blocks where extensions are required for further studies. OVL first took a two-year extension of the exploration period till June 2014 and then another one year. That extended licence expired on June 15, 2015. The company has so far invested $50.88 million in the block.
The block lies in the part of 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 forayed into Vietnam as early as 1988, when it bagged the exploration licence for Block 06.1.
The company got two exploration blocks – Block 127 and Block 128, in 2006. However, Block 127 was relinquished due to poor prospectivity but the other Block 128 was retained.
The first extension followed China putting the area under Block 128 for global bidding.
OVL continues to own 45 per cent stake 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.
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).