Vietnam exit

Vol 15, PW 15 (09 Feb 12) News in Brief

ONGC Videsh (OVL) might be forced to exit deepwater exploration block B128 offshore Vietnam after paying a $15m penalty.

PETROWATCH learns OVL’s three-year extension to Phase-I at this block ends in June. “It will be impossible to secure another extension,” says an industry source.

“But OVL still hasn’t completed its commitment to drill one well during Phase-I.” OVL’s previous attempt to drill this well failed in September 2010 when Japanese rig Hakuryu-V could not be anchored on the hard seabed.

Still, Nigeria’s Viking Mooring finally completed its ‘anchoring studies’ at the block last month. So OVL might rush to either share or borrow a rig from another operator in the region.

OVL has spent nearly $46m at this block so far, exceeding its commitment to spend $29m, and has shot 1650-sq km of 3D. OVL won the 7058-sq km block B128 and adjacent block B127 in Vietnam’s 2004 bidding round but later quit B127 in March 2011 because it was not ‘prospective.