The Hindu Business Line : OVL signs production sharing contracts with PetroVietnam

Sharing output
In the event of a commercial discovery, PetroVietnam through a wholly owned affiliate has the option of obtaining up to a 20 per cent participating interest in the blocks.

New Delhi , May 25

ONGC Videsh Ltd (OVL) has signed the production sharing contracts with Vietnam Oil and Gas Corporation (PetroVietnam) for two offshore blocks (127 & 128) in Vietnam's Phu Khanh Basin.

In a statement issued here on Thursday, OVL said that the overseas arm of ONGC would be the operator of the blocks and would have a 100 per cent participating interest.

In the event of a commercial discovery, PetroVietnam through a wholly owned affiliate has the option of obtaining up to a 20 per cent participating interest in the blocks. Blocks 127 & 128 cover approximately 9,246 sq. km and 7,058 sq. km areas, respectively, and lie alongside the eastern coastline of Vietnam.

The exploratory phase of both the contracts is seven years, with a firm minimum work programme 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 to retain the acreage, the company statement added.

Successful bidder

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.

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 two companies have decided to set up a joint study group to evaluate and participate in projects of mutual interest in third countries as well.