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India Says ONGC Videsh Will Return South China Sea Block

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India Says ONGC Videsh Will Return South China Sea Block

NEW DELHI - ONGC Videsh Ltd., which makes overseas investments for India's state-run Oil & Natural Gas Corp., will return one more deep-water block in the South China Sea to Vietnam because exploration there isn't commercially viable, the Indian government said Tuesday.

The government statement, made in parliament by Junior Oil Minister R.P.N. Singh, comes amid China asserting its claims over the South China Sea. Beijing had last year warned that ONGC Videsh's plans for the area were illegal.

The potentially energy-rich South China Sea is partly claimed by China, Vietnam, Malaysia, Brunei and Taiwan and is regarded by U.S. officials as one of the biggest potential military flash points in the region.

In a written reply to a question in the upper house of parliament, Singh said India isn't a party to the dispute over the South China Sea and that activities by Indian companies in the region were "purely commercial."

ONGC Videsh had 2006 won a contract to explore Block 127 and Block 128 in the Phu Khanh basin jointly with Vietnam's state-run PetroVietnam.

The Indian company gave back Block 127 to PetroVietnam in the financial year ended March 2011 after failing to discover hydrocarbons.

On Block 128, which ONGC Videsh will now surrender, the minister said efforts to drill a well there wasn't successful due to problems in anchoring the rig on a hard sea bottom at the drilling site.

"Considering previous experience and perceived risk-reward analysis, block 128 was found to be techno-commercially not viable," he added.

The Indian company currently operates one field off Vietnam's south coast, Block 06.1 in the Nam Con Son basin. 

Copyright (c) 2012 Dow Jones & Company, Inc.

WHAT DO YOU THINK?

Post a Comment Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
saksham | Jul. 25, 2012
Well I wish that the surrender of block 128 comes, Just as a result of non commercial viability, else .... there's more to do for India(us)...and a serious encouragement to china.. !!

Nitin Anand | Jun. 8, 2012
If the exploration work has been called off by India on the facts of the statement given by Junior Oil Minister R.P.N. Singh. then its a step up for India, Wherein we chose to go by the real sense of trading. However, if there is any hidden reason as per the claims of our counterpart we think its a hit on the Sovereignity of INDIA.

Tapan | May. 17, 2012
India cannot find hydrocarbon on its own soil, where private companies have succeeded. There are plenty other potentially known areas where it can explore opportunities. India need not go into this flash point which is still potential a conflic zone. I think again India is repeating big mistake participating for such opportunities. Countries like Japan, South Korea are far ahead of India in terms of hydrocarbong exploration & drilling technology yet they are abstaining. Only our Politicians know the reason better then me. Today while contiesy like US, UK, Germany & France bow to the pressure of China, i do not know the reason why India wants to find a place in such a boiling issue, knowing that its resources are far-far-far less then China in every respect.

Obaidur Rahman | May. 15, 2012
It is better not to do business in the area bone of contention.Business needs open and fresh atmosphere..


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