OVL stays invested in Vietnam despite poor prospects and China's pressure. Photo: businesstoday.in
Authorities in Vietnam have granted ONGC Videsh Ltd. (OVL), the overseas arm of India's state-owned Oil and Natural Gas Corp. Ltd. (ONGC), a one-year extension to explore Block 128 off the country’s coast that had expired in mid-June, Indian media reported.
This is the fourth extension for OVL to explore Block 128, the license for which is now valid till June 15, 2017, sources close to the matter said.
OVL has already received two extensions for Block 128, with the first two-year extension granted till June 2014, followed by two one-year extensions till June this year.
OVL signed Production Sharing Contract (PSC) for the 7,058 square-kilometer Block 128 offshore southern Vietnam on May 24, 2006. The Vietnamese Ministry of Planning and Investment issued investment license for the block on June 16, 2006.
The company has so far invested $50.88 million in the block, but it has not found any hydrocarbon there.
The block lies in the part of the East Sea over which a number of countries including China and Vietnam claim sovereignty.
Although China has warned OVL that its exploration activities off the Vietnamese coast were illegal and violated China’s sovereignty, OVL continues to stay invested to maintain India’s interest in disputed waters.
According to ONGC Group’s Perspective Plan 2030, OVL’s oil and gas production is expected to increase from the current level of 7.26 million tons of oil equivalent (MMtoe) to 20 MMtoe by 2017-2018 and 60 MMtoe by 2029-2030.