ONGC Videsh Wins 16-Year Vietnam Extension

20 Aug 2024 , 02:28 PM

ONGC Videsh Ltd (OVL), India’s flagship overseas oil firm, has secured a 16-year extension for its oil and gas production in Vietnam and an additional three years for exploration in the South China Sea.

Vietnamese authorities have extended the production sharing contract (PSC) for Block 06.1 in the Nam Con Son Basin until 2039. OVL holds a 45% stake in this block, with Zarubezhneft EP BV and PetroVietnam holding 35% and 20%, respectively.

The Block 06.1 extension is effective from May 19, 2023, and the block currently produces about 1 million tonnes of oil and oil equivalent gas.

For Block 128 in the South China Sea, OVL has been granted an eighth extension until June 15, 2026. This block has been under exploration since 2006, but no commercially recoverable reserves have been found to date.

Despite no significant discoveries, OVL continues exploration due to strategic interests in the contested South China Sea region. The company has conducted various seismic studies and drilling activities as part of its exploration obligations.

The PSC for Block 128 was initially granted in 2006 and has seen multiple extensions due to the strategic importance and challenges in the region.

OVL first entered Vietnam in 1988 with Block 06.1 and has since expanded its presence, retaining Block 128 despite earlier relinquishing Block 127 due to poor prospects.