OVL acquires oil block in Australia

ONGC Videsh Ltd (OVL) has acquired a majority interest in an exploratory block in Australia. According to OVL, the company has acquired 55 p...

ONGC Videsh Ltd (OVL) has acquired a majority interest in an exploratory block in Australia. According to OVL, the company has acquired 55 per cent stake in Block WA 306 P, located in the North West Shelf in offshore Australia, from Canadian firm Antrim Energy Inc.

According to ONGC, while OVL is not paying any money for the acquisition, it will carry the entire cost of drilling of the first exploratory well on the block, likely in September. In case of a discovery, OVL will get to recover the cost of the exploration first. The produce thereafter will be shared among the partners in proportion to their shareholding.

Antrim, which currently holds 87.5 per cent stake in the block, estimates up to 500 million barrels of recoverable oil in the block. The first well in the browse basin of the North West Shelf could yield 150 million barrels of recoverable oil. Magellan Petroleum holds the remaining 12.5 per cent interest.

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Apart from Australia, OVL already has oil and gas assets in Myanmar, Vietnam, Iran, Iraq, Syria, Libya, Sudan and Angola. OVL signed the farm-in agreement on August 27. The acquisition will become final, after approval by the Australian government.

The exploration block, spread over 4,600 sq km, contains a cluster of drilling prospects in Barcoo sub-basin. With this acquisition, OVL has started extending its area of operation with presence in the hitherto sparsely-explored regions of the Browse basin.

Chairman of OVL, Subir Raha told the media that “Our first acquisition in Australia should pave the way for OVL’s participation in many other opportunities in the Australian hydrocarbon sector.