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ONGC Videsh to exit Kazakhstan’s Satpayev oil block in FY20

Tuesday, Aug 27, 2019

 

–Source: ONGC Videsh to exit Kazakhstan block due to poor prospects

–ONGC Videsh invest in Kazakhstan block at around $300 mln

 

By Sukalp Sharma

 

NEW DELHI – ONGC Videsh Ltd, the overseas investment arm of state-owned Oil and Natural Gas Corp Ltd, will exit the Satpayev exploration block in Kazakhstan within the current financial year due to poor hydrocarbon prospectivity, a senior company official told Cogencis.

 

ONGC Videsh had bought 25% stake in the project in 2011 but was unable to find any oil that could be produced commercially. The company had decided to exit the project in 2018-19 (Apr-Mar). It has now initiated the relinquishment process and is confident of it being concluded in the current financial year itself, said the official, who did not wish to be named.

 

In 2011, ONGC Videsh had paid around $80 mln as assignment fee for the project to Kazakhstan's national oil company JSC NC KazMunaiGas and another $13 mln as signing fee to Kazakhstan. So far, ONGC Videsh has invested a little over $300 mln in the project.

 

Satpayev exploration block, located in the Kazakhstan sector of the North

Caspian Sea, covers an area of 1,481 sq km. The block, located close to four major discoveries in the North Caspian Sea, was believed to have two prospective areas holding an estimated 256 mln tn of oil and gas resources. ONGC Videsh had estimated peak output from the block at 287,000 bpd.

 

Initially, ONGC Videsh and steel baron L.N. Mittal's private investment firm Mittal Investment Sarl planned to collectively pick up the 25% stake in the Satpayev block that the Kazakhstan government had offered. However, in November 2009, Mittal Investment pulled out of the agreement and ONGC Videsh decided to go solo.

 

At 1431 IST, shares of ONGC traded at 125.15 rupees on the National Stock Exchange, 1.1% higher than the previous close.  End

 

US$1 = 71.7075 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Avishek Dutta

 

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This copy was first published on the Cogencis WorkStation

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