ONGC Videsh seeks exploration licence extension for Vietnam oil block


ONGC Videsh seeks exploration licence extension for Vietnam oil block

NEW DELHI: ONGC Videsh Ltd, the overseas arm of state explorer Oil and Natural Gas Corp, has sought a one year extension of exploration licence for a Vietnam oil block in the contested waters of the South China Sea despite poor hydrocarbon prospective.

OVL has applied to the Vietnamese authorities for a third extension of the exploration licence for Block 128 to maintain India's strategic interest in the South China Sea, a company official said. 

The company had in May 2006 signed a production sharing contract (PSC) for the deep-water exploration Block 128 having an area of 7,058 square kilometres in Offshore Phu Khanh Basin, Vietnam. 


Vietnam's Ministry of Petroleum & Industries issued investment license on June 16, 2006. During the exploration period, acquisition of 3D seismic data and reprocessing of 2D seismic data as well as drilling of one commitment exploratory well was carried out. 

OVL first took a two year extension of the exploration period till June 2014 and then another one year. That extended license expired on June 15 and "the company has applied for extension of Phase-1 for one more year," the official said adding that the company has so far invested USD 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 has not found any hydrocarbons in the block but will continue operations in line with India's strategic and diplomatic interest in the region," he said. 

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 after completing the work programme, but the other Block 128 was retained. 


The official said the first extension followed China putting the area under Block 128 for global bidding. 

OVL holds 100 per cent interest in Block 128. 

The official said like in case of Block 127, OVL had wanted to exit the adjacent Block 128 because of poor prospective. But decided to stay put because of India's strategic interests in the region. 


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. 

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