NEW DELHI: India's ONGC Videsh Ltd. (OVL), the overseas arm of the Oil and Natural Gas Corporation (ONGC), had bagged the exploration Block No. 8 in Iraq. The contract was signed in November 2000. During a visit to their Baghdad office a fortnight ago, OVL officials had informal talks with their Iraqi counterparts and received an assurance that they would be allowed to proceed with the exploration and development programme for the block in southern Iraq. OVL had commenced work on the acquisition, processing and interpretation of the seismic data of the block, which has a reserve expectation of around 600 million barrels. OVL has earmarked $15 million investment for the first phase of the exploration programme. "We are hopeful the contract will be honoured as ours is an exploration venture involving considerable investment and risk and does not fall into a bonanza proposal," a senior petroleum ministry official told IANS. "Considerable investment has already been made in the block, including opening of an office in Baghdad. Tenders have already been invited for undertaking seismic survey and offers are under evaluation. We are hopeful no review of the contract will be done," the official said. The fact that most of the contracts awarded under the U.N. oil-for-food programme are being honoured has given India added hope that there will be no rethink on the exploration deal. Dependent on imports for 70 percent of its requirement, India is keen to resume oil imports from Iraq and is seeking opportunities to secure equity stake in potentially rich explorations blocks overseas. As for negotiations with Iraqi authorities for award of an oil field discovered in Tuba, India is hopeful that its proposal will still be considered. Tuba lies in southern Iraq between the Rumaila and Zubair oilfields and could reportedly yield as much as 300,000 barrels per day (bpd) of medium and heavy crude. "As the negotiations were in the last stages, the OVL-led consortium should be allowed to continue with the talks," the ministry official said. The OVL-led consortium includes private sector Reliance Industries (RIL) and Algerian state company Sonatrach in equal partnership for securing the oilfield, which would need around $600 million initial investment, sources said. OVL has also started preliminary talks with Iraqi officials to undertake any other oil and gas projects as the nation gears up to resume oil production.
Source: IANS