ONGC Videsh Signs PSC for Three Myanmar Deepwater Blocks
ONGC Videsh Ltd., the wholly-owned subsidiary of ONGC has signed Production Sharing Contracts (PSCs) with the Myanmar Oil and Gas Enterprise (MOGE), the Govt. of the Union of Myanmar enterprise for three deepwater exploration blocks: AD-2, AD-3 & AD-9. OVL is the operator with 100 percent Participating Interest in all the three deepwater blocks.
The signing of the contracts took place on September 23, 2007 at Nay Pyi Taw, the administrative capital of Myanmar. The Production Sharing Contract was signed by Mr. R S Butola, Managing Director of OVL and by Mr. U Myint Htay, Managing Director of MOGE. The occasion was graced by Mr. Murli Deora, Hon'ble Minister of Petroleum & Natural Gas, India and H.E. Brig-General Lun Thi, Minister of Energy, Myanmar and Secretary, Ministry of Petroleum & Natural Gas, Govt. of India.
The blocks have been awarded to OVL on the basis of mutual understanding and cooperation between India and Myanmar in the hydrocarbon sector. All the 3 blocks have good hydrocarbon potential as they are close to shallow water blocks A-1 & A-3 where OVL is part of the Consortium which is developing the gas find in these two blocks.
The blocks AD2, A3 and AD3 extend over an area of 8100 sq. km, 9900 sq. km and 7800 sq. km respectively with water-depths of 1,500 to 3,000 meters in the Rakhine Coasts in Myanmar. The exploration period spread over four phases extends to 5 years for AD2; and 7 years for AD3 and AD9. Upon discovery of oil and gas, development and production operations shall spread over a period of 20 years. The investment of OVL on account of minimum work commitment in the blocks for all phases taken together is slated to be about US$150 million.
The consortium of blocks A1 and A3 had recently declared a total discovery of GIIP of 5.35 tcf of gas. The total Indian share in this discovery is 30%, OVL being a 20% participating interest holder and GAIL holding another 10%.
ONGC/OVL and MOGE, the authorized body of Myanmar are cooperating in the field of hydrocarbon exploration studies in Myanmar. Earlier in 2005, a joint Regional Geological Study was carried out by the two agencies in an onshore geological setting in Myanmar to understand the hydrocarbon potential. The Institute of Drilling Technology, ONGC had also imparted training to a team of oil & gas professionals from Myanmar. The cooperation between the two agencies is slated to expand further.
Prior to the signing of the PSCs, Mr. Murli Deora, Hon'ble Minister of Petroleum & Natural Gas, Govt. of India and H.E. Brig Gen Lun Thi, Minister of Energy, Myanmar held wide ranging bilateral discussions on cooperation between the two countries in hydrocarbon sector. Speaking on the occasion Mr. Murli Deora, Minister of Petroleum & Natural Gas, Govt. of India noted that the signing of Production Sharing Contracts for three blocks with OVL and MOGE was a very happy development and augurs well for expanding the cooperation between two neighboring countries. He added that the synergies between the two countries need to be harnessed to the full advantage by both sides to the mutual benefit of its people.
Mr. R S Sharma, Chairman of OVL and CMD of ONGC, said in New Delhi that this contract takes ONGC a step ahead in its strategic business pursuit of tying up equity Oil & Gas sources in its energy portfolio.
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