ONGC Videsh Ltd (OVL), has secured a 16-year extension for its production sharing contract (PSC) for Block 06.1 in Vietnam’s Nam Con Son Basin, allowing it to continue producing oil and gas until 2039. In addition, the Vietnamese authorities have granted a three-year extension for OVL to continue exploring Block 128 in the contested waters of the South China Sea, according to company officials.
OVL, the overseas arm of the state-owned Oil and Natural Gas Corporation (ONGC), holds a 45% stake in Block 06.1, which was acquired in 1988. The block, operated by Zarubezhneft EP BV (35% interest) with PetroVietnam holding the remaining 20%, produces approximately 1 million tonnes of oil and oil equivalent gas annually. The extension of the PSC for this block is effective from May 19, 2023.
For Block 128, which has seen exploration efforts since 2006, the latest extension extends the exploration license until June 15, 2026. Despite not yet finding commercially viable reserves, OVL has maintained its presence in the block due to India’s strategic interests in the South China Sea, an area marked by territorial disputes with China. The Vietnamese government supports OVL’s continued exploration efforts as a counterbalance to Chinese influence in the region.
