ONGC Videsh, the overseas arm of Oil and Natural Gas Corporation (ONGC), has been granted a 16-year extension for oil and gas production in Vietnam, along with a three-year extension for exploration in the South China Sea.
What Happened: Vietnamese authorities have extended the production sharing contract (PSC) for the producing Block 06.1 in the offshore Nam Con Son basin until 2039, PTI reported. Furthermore, an eighth extension has been granted for oil and gas exploration in Block 128 in the South China Sea.
ONGC Videsh holds a 45% stake in Block 06.1, which yields about 1 million tonnes of oil and oil equivalent gas. The block has Zarubezhneft EP BV as the operator with 35% interest and PetroVietnam holding the remaining 20%.
For Block 128, the seventh extension for oil and gas exploration was until June 15, 2023, and OVL had requested a three-year extension. The Vietnamese regulator PVN has now prolonged the license until June 15, 2026. Despite the absence of any commercially recoverable oil and gas reserves in the block for the past 18 years, the company has retained its presence due to India’s strategic interest in the South China Sea.
ONGC Videsh first entered Vietnam in 1988 when it secured the exploration license for Block 06.1. The company, in 2006, acquired two exploration blocks — Block 127 and Block 128. While Block 127 was relinquished due to poor prospects, the other block was retained.
Earlier this month, the company received approval from the Government of India to invest ₹18,365 crore into ONGC Petro additions Limited (OPaL), elevating OPaL to a subsidiary of ONGC.
Moreover, the Ministry of Petroleum and Natural Gas announced a 20% premium on the gas produced from new wells or interventions. The new premiums apply to the oil fields of ONGC and Oil India. The development cheered investors and brokerages.
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