ONGC Videsh gets extension for exploration in Vietnamese offshore field

29 Aug 2022 , 03:46 PM

The sixth extension has been granted to India's premier international company, ONGC Videsh Ltd (OVL), to conduct oil and gas exploration in a Vietnamese area in the South China Sea, according to news reports.

They claimed that OVL, the state-owned Oil and Natural Gas Corporation's (ONGC) abroad division, has successfully negotiated an extension of the exploration phase to June 15, 2023.

In the 16 years, it has been exploring the block, the company has not discovered any economically recoverable oil and gas reserves, but it has remained present because of India's strategic interest in the South China Sea.

Vietnam wants the Indian company as well to oppose Chinese interventions in the disputed waters.

For the deep-water exploration Block 128 in Vietnam's offshore Phu Khanh Basin, which covers an area of 7,058 square kilometres, OVL and PetroVietnam signed a production sharing contract (PSC) in May 2006. On June 16, 2006, it received an investment licence, making the PSC effective.

The company has finished drilling the committed one well, shooting 3D seismic data, and reprocessing 2D seismic data as required by the licence.

According to news reports, PetroVietnam has agreed to disclose some technical information about the block's neighbouring area for modelling the petroleum system and other associated studies to improve geological understanding.

The company has the data and is currently modelling the petroleum system to reduce exploration risk and assess the prospectively of the block.

OVL first extended the exploration time by two years, through June 2014, and then by another year. On May 28, 2015, a third extension was given, and a fourth came about in 2016. In 2017, a fifth two-year extension was granted, and a sixth, from June 16, 2019, to June 15, 2021, was also granted.

Although the business has not discovered any hydrocarbon in the block, it is nevertheless investing to protect India's strategic interest.

The area where the block is located is where China asserts its control over the South China Sea. Beijing had informed OVL that its oil and gas exploration efforts off the coast of Vietnam were unlawful and infringed on China's sovereignty in 2011, but the business persisted.

When OVL won the exploration licence for Block 6.1, it undertook its first expedition into Vietnam in 1988.

Block 6.01 is 45% owned by OVL, and during the 2021—22 fiscal year, 0.919 million tonnes of condensate and oil equivalent gas were produced from the block.

Blocks 127 and 128 of the 2006 Exploration Blocks were awarded to the company. Due to bleak prospects, Block 127 was given up, but the other block was kept.

After China opened up the territory covered by Block 128 to international bids, the block received its first extension.

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