OVL Secures Vital Contract Extensions for Vietnam Oil Blocks

ONGC Videsh Ltd (OVL), India's premier overseas oil firm, has secured a 16-year extension for its production sharing contract (PSC) for Block 06.1 in Vietnam's Nam Con Son Basin, extending its oil and gas production rights until 2039. This significant extension allows OVL, which holds a 45% stake in the block, to continue its operations in a region that produces around 1 million tonnes of oil and gas annually. The extension is effective from May 19, 2023.

In a strategic move, Vietnamese authorities have also granted OVL a three-year extension to continue exploration in Block 128, located in the contentious South China Sea. This extension, valid until June 15, 2026, underscores India's commitment to its strategic interests in the region, despite the challenging exploration conditions and ongoing territorial disputes with China.

Block 06.1, operated by Zarubezhneft EP BV (35% interest) alongside PetroVietnam (20% interest), has been a cornerstone of OVL's international portfolio since its acquisition in 1988. The extension of the PSC solidifies OVL's long-term presence in Vietnam’s energy sector.

Meanwhile, Block 128, retained by OVL since 2006 despite its complex exploration environment, continues to be a focus of strategic interest. OVL's persistent exploration efforts, supported by the Vietnamese government, serve as a counterbalance to China's influence in the South China Sea.

OVL’s continued operations in these blocks highlight India’s strategic interest in the region, reinforcing its energy security and geopolitical presence in the South China Sea, despite the ongoing challenges and tensions with Beijing.

News by Rahul Yelligetti