The company had applied for a third extension of the exploration licence in May
New Delhi: State-owned Oil and Natural Gas Corp. Ltd (ONGC) on Thursday said it has received a one-year extension to explore in a Vietnam oil block in the contested waters of the South China Sea. It had in May applied to the Vietnamese authorities for a third extension of the exploration licence for deep sea Block 128 to maintain India’s strategic interest in the South China Sea. In a regulatory filing, ONGC said its overseas investment arm, ONGC Videsh Ltd (OVL) had applied for extension of block to PetroVietnam, Vietnam’s national oil company, on 28 May 2015. “In response of ONGC Videsh request, PetroVietnam has granted extension of the block up to 15 June 2016,” it said. OVL had signed Production Sharing Contract (PSC) for the 7,058 square km Block 128 in offshore Phu Khanh Basin, Vietnam on 24 May 2006. The ministry of planning and investment (MPI), Vietnam issued investment licence for the Block on 16 June 2006, being effective date of the PSC, ONGC said. The company has not found any hydrocarbon in the block but is continuing to stay invested. ONGC termed 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 15 June 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 entered 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 holds 100% interest in Block 128. 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% 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. Copyright © 2015 HT Media Ltd. All Rights Reserved
