|ONGC Videsh & PetroVietnam sign production sharing contracts for blocks 127 & 128, offshore Vietnam|
29 June, 2006
ONGC Videsh Ltd. (OVL) has signed the Production Sharing Contracts with Vietnam Oil and Gas Corporation ("PetroVietnam”) for Blocks 127 & 128, offshore Vietnam in the Phu Khanh Basin. OVL shall be the operator of the block and will have a 100% participating interest. In the event of a commercial discovery, PetroVietnam through a wholly owned affiliate has the option of obtaining up to a 20 percent participating interest in the Blocks.
The contract signing ceremony held in Hanoi on May 24 was presided over by the Vice Minister of Industry of Vietnam, Mr. Do Huu Hao, and witnessed by the Indian Ambassador to Vietnam Mr. N. Ravi. The contracts were signed by Mr. R.S. Butola, Managing Director OVL and Dr. Tran Ngoc Canh, President & CEO PetroVietnam. The ceremony also marked the completion of 18 years of ONGC Videsh in Vietnam.
Blocks 127 & 128 cover approximately 9,246 sq.km and 7,058 sq.km. area respectively and lie alongside the eastern coastline of Vietnam, northeast of Ho Chi Minh City. The exploratory phase of both the contracts is seven years, with a firm minimum work program during the first three years that includes the acquisition of new 3-D seismic data and the drilling of two exploratory wells in Block 127 and one exploratory well in Block 128. The exploratory phase is followed by two optional two-year periods during which a well has to be drilled in order to retain the acreage.
OVL was selected as the successful bidder in the global competitive bidding for nine offshore exploration blocks in the Vietnam 2004 Licensing Round. OVL has been awarded both the blocks it had bid for.
Mr. Butola Managing Director OVL had earlier in the day held a meeting with Dr. Canh, President & CEO, PetroVietnam. The two companies have decided to set up a Joint Study Group with a view to evaluate and participate in projects of mutual interest in third countries as well. Mr. Butola along with H.E. N. Ravi, the Ambassador of India also called on H.E. Hoang Trung Hai, the Minister of Industry. Mr. Hai appreciated the role played by ONGC Videsh in the nascent hydrocarbon industry of Vietnam and helping meet energy requirement of the country. Mr. Hai assured continued support to the efforts of ONGC in this regard.
Mr. Subir Raha, Chairman & Managing Director, ONGC observed that signing of the Block 127 & 128 production sharing contracts marks the OVL commitment to contribute to the growing economy of Vietnam and sustain OVL’s continued search for overseas oil & gas assets in keeping with the national objective of energy security.
Mr. Raha added that Blocks 127 & 128 provide a promising opportunity and OVL is very pleased to work with PetroVietnam to help address the country's growing energy demand. Its commitment to Vietnam will continue to be reinforced through mutually beneficial collaboration.
OVL had signed the first ever Petroleum Production Sharing Contract (PSC) with PetroVietnam in 1988. The company, together with its Partners discovered the Lan tay and Lan Do gas field in Block 6 during 1992-93. The Block 06.1 project is now considered to be the most important gas project in the country and has contributed towards alleviating the country's power shortages. It commenced commercial production of gas from January 2003 and has since produced more than 8 billion cubic meters of gas. ONGC-VL has 45% participating interest, British Petroleum (BP) 35% and PetroVietnam (PV) 20% being the other partners in the project.
ONGC Videsh Ltd. (OVL), trans-nationally operates Exploration & Production (E&P) business in 13 countries. ONGC is India’s Most Valuable Corporate in terms of Market Capitalization, Net Worth and Net Profit. Currently recognised as the best Oil & Gas company in Asia, ONGC is a Fortune Global 500 Corporate, and ranks 18th among world’s Integrated Oil & Gas companies in the PFC Energy 50 list.
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