ONGC Videsh Ltd (OVL), secured a sixteen year extension for its production sharing contract (PSC) concerning Block 06.1 in Vietnam’s Nam Con Son Basin, extending its oil and gas production activities until 2039.
Additionally, Vietnamese authorities have granted OVL a three-year extension for exploring Block 128 in the contested waters of the South China Sea, according to company representatives.
As the international arm of Oil and Natural Gas Corporation (ONGC), OVL holds a 45% stake in Block 06.1, which it acquired in 1988. The block, operated by Zarubezhneft EP BV (35% stake) with PetroVietnam owning the remaining 20%, produces about one million tons of oil and oil equivalent gas annually. The PSC extension for Block 06.1 is effective from May 19, 2023.
For Block 128, which has been under exploration since 2006, the recent extension prolongs the exploration license until June 15, 2026. Despite not yet discovering commercially viable reserves, OVL has retained its interest in the block due to India’s strategic objectives in the South China Sea, a region with ongoing territorial disputes with China. The Vietnamese government supports OVL’s continued exploration as a countermeasure to Chinese dominance in the area.
OVL first ventured into Vietnam in 1988 with the exploration license for Block 06.1 and expanded its operations in 2006 by acquiring exploration licenses for Blocks 127 and 128. While Block 127 was relinquished due to limited prospects, Block 128 has seen several extensions despite challenging exploration conditions.
The company has carried out extensive seismic data acquisition and reprocessing as part of its exploration activities and continues to gather more data to evaluate the block’s potential.
As reported by newsonprojects.com, the ongoing exploration in Block 128, situated in a region claimed by China, highlights India’s strategic interest in maintaining a foothold in the South China Sea, even in the face of prior warnings from Beijing.
