The Cabinet Committee on Economic Affairs authorized OVL to make an additional project investment of USD 149.46 million for further development and exploration of Block 06.1 Project, Vietnam from the revenue proceeds of the Project without any funding from Government of India. In the event of any cost overrun beyond the above amount USD 149.46 million OVL shall bring a fresh proposal to the Empowered Committee of Secretaries.
ONGC Videsh Limited a wholly owned subsidiary of Oil & Natural Gas Corporation Limited has a 45% Participating Interest in a gas producing shallow water offshore Block 06.1 under a Petroleum Production Sharing Contract with Petro Vietnam the National Oil Company of Vietnam having 20% P1 and BP Exploration Ltd the Operator having 35% P1. OVL had an initial investment commitment of USD 228 Million. The production from the Lan Tay field in Block 06.1 in Vietnam commenced on January 21st 2003 after completion of Phase-I of the project. The initial production at 0.81 Billion Cubic Meter (BCM) in 2003 has increased to 4.106 BCM in 2008-2009 and 45% share of OVL in the year 2008-2009 was 1.848 BCM.
The original Feasibility Report envisaged the development of the Project in three phases. Development of Phase I & II have been completed on 17.01.2008. The present proposal is for an additional investment of US D 149.46 million by OVL in the project. The Phase III of the project envisages development of Lan Do field which includes drilling of two developments wells, sub sea completion and tie back of the wells with Lan Tay platform through a common pipe line. The revised estimated expenditure for the whole project during 1998-2015 is USD 838.80 million against the earlier estimates of USD 228 million to USD 377.36 million thereby necessitating an additional expenditure of USD 149.46 million.
The additional investment is expected to provide higher reserve accretion of hydrocarbon and more production from the project to OVL.
